Uzbekistan and Russian Gazprom company will sign a production sharing agreement (PSA) before March 1, 2015 on the development of Jel gas and condensate field in Uzbekistan, according to the protocol signed after the meeting of Uzbek-Russian intergovernmental commission on economic cooperation held in Tashkent on Nov.26.

Under the protocol, the intergovernmental commission instructed the Uzbekneftegaz National Holding Company and Gazprom to hold negotiations before Dec.10 on preparations for signing the agreement on the basic principles of developing the Jel field in accordance with the PSA terms.

The intergovernmental commission also instructed to prepare and conduct interstate procedures and sign a PSA on the Jel field.

Jel field is located near the Shakhpakhty block which is being operated by Gazprom and is linked to the main gas pipelines. Therefore, the development of the Jel field is cost-effective.

Gazprom started the production of natural gas at Shakhpakhty field (Ustyurt, Karakalpakstan, north-east of Uzbekistan) in accordance with PSA terms in August 2004.

Russian company made $25 million worth of investment in this project. The total volume of gas production currently exceeds 2 billion cubic meters of gas.

A five-year program on geological exploration work in Uzbekistan's Ustyurt region was adopted in 2006. The total cost of these operations stood at $400 million.

Geological and geophysical researches were conducted and prospecting and exploration wells were drilled in 2006-2008.

Jel gas and condensate field was discovered at Shakhpakhty investment block in 2009-2011.

The field's gas reserve can near 10 billion cubic meters, according to the preliminary estimates.

Russian Gazprom announced the completion of geological exploration work in the Ustyurt region in February 2012 and expressed intention to expand the resource base of its projects in Uzbekistan.

 

Uzbekistan is a leading trade and economic partner of Kazakhstan in Central Asia, Kazakh President Nursultan Nazarbayev said on November 25 during negotiations with his Uzbek counterpart Islam Karimov at an extended format.

"Despite the negative trends in the world economy and the reduction of prices of basic products, the trade turnover between our countries is growing," Nazarbayev said. "At the same time I believe that our countries have not yet fully exploited their economic capacities. Given the fact that the product line is narrow, the intergovernmental commission and our governments should conduct works to increase the volume of trade."

He also thanked for the support of Kazakh candidacy by Uzbekistan to host the EXPO-2017 international exhibition.

"We have started the construction process of the exhibition complex. We allocate the necessary funds for a worthy holding of the event," said the president of Kazakhstan. "We hope that Uzbekistan will be present at this exhibition, and our country, in turn, is ready to create the necessary conditions."

In conclusion, the president expressed confidence that the talks will be an important point in strengthening mutual relations, including trade and economic cooperation.

Karimov, for his part, said his visit is a logical continuation of the meeting of the two presidents, held in 2013 in Tashkent.

"We consider this visit as a good opportunity to critically examine the whole complex of the Uzbek-Kazakh multifaceted relations and exchange views on topical issues of regional and international issues," said the president of Uzbekistan. "We are deeply convinced that the adoption of historically important Treaty on Strategic Partnership was a relevant step."

Karimov noted today, especially in light of processes emerging in the world, this document has grabbed global attentions.

Karimov went on adding that Uzbekistan welcomes the active foreign policy position of Kazakhstan and initiatives of Nazarbayev aimed at strengthening regional and international security, enhancing the authority and role of the country in the international arena.

"At today's talks, we emphasized our belief in the commonness and the indivisibility of our long-term strategic and national priorities, reaffirmed the political will and mutual commitment to co-ordinate and work together to resolve the ambitious goals and objectives that we have in mind," said Karimov.

Following the high-level talks, the two presidents adopted a joint statement in which they expressed mutual desire for further development of cooperation.

The two countries also signed a Protocol on amendment to the intergovernmental agreement on cooperation in the field of protection of industrial property dated June 2, 1997 and a program of cooperation between the foreign ministries of Kazakhstan and Uzbekistan for 2015- 2016.

The legal base of bilateral cooperation has more than 100 intergovernmental and interdepartmental documents. Legal basis for relations between the two countries includes the Treaty of eternal friendship between Kazakhstan and Uzbekistan, which was concluded in 1998 and the Strategic Partnership Agreement, signed in June 2013 during the official visit of President Nazarbayev to Uzbekistan.

Position of the two sides also coincide in strengthening the nuclear nonproliferation regime, economic reconstruction of Afghanistan, the revival of the Aral Sea, the development of transit transport corridors and alternative energy sources and rational use of water and energy resources of the region in accordance with international law.

The trade turnover between the two Central Asian countries quadrupled from 2005 to 2013, exceeding $2 billion. This figure amounted to $1.5 billion in the first nine months of 2014.

 

Hyundai Engineering received an order to build a super-sized gas processing facility, worth 3 trillion won (US$2.7 billion). This is the biggest construction order since the foundation of the company.

The contractor is LUOC, a joint venture between Lukoil and Uzbekistan National UNG. Hyundai Engineering is involved in the project as part of a consortium with Enter Engineering, a local construction company in Uzbekistan.

The total amount of the project is US$2.66 billion and Hyundai Engineering's portion is US$2.1 billion (about 2.2 trillion won). Hyundai Engineering will carry out the whole process of planning, purchasing, building, and testing. The construction will last for 44 months after the groundbreaking.

The Kandym Gas Processing Facility will be built near the Turkmenistan border, 520km southwest of Tashkent, It will process an annual 8.1 billion m³ of natural gas after its completion.

An official of Hyundai Engineering said, "Although Uzbekistan is rich in natural resources with 1 trillion m³ of proven natural gas reserves, the country needs to develop new gas fields urgently, as gas fields become superannuated." He added, "We expect to obtain additional orders from this region in the future."