Old Pipelines Could Slow Russian Gas Deal

Russia may have upped its order of Uzbek gas by nearly 50 per cent, but Uzbekistan’s tired pipeline networks will make it hard to deliver the promised volumes, NBCentralAsia’s energy experts say.



The Russian energy giant Gazprom recently announced it was raising the amount of gas it will buy from Uzbekistan to 13 billion cubic metres this year, compared with nine million cu m last year.



With Lukoil, another Russian company, Gazprom dominates the Uzbek gas export market and both firms plan to extraction in the country by conducting their own exploration there.



Uzbekistan extracts around 60 billion cu m of gas per year, most of which is consumed domestically. Gazprom controls Uzbek gas deliveries to Russia, via the Bukhara-Ural pipeline.



NBCentralAsia energy experts say increasing the supply volume will almost double the amount of gas going through pipelines that already operating near breaking point.



“Uzbekistan cannot independently increase gas extraction and modernise the existing gas pipelines,” said an expert at the state-run oil and gas firm Uzbekneftegas who wished to remain anonymous.



An NBCentralAsia expert added, “Though lack of money to maintain major pipelines, the pumping equipment has worn out and the pipeline’s condition has deteriorated. Uzbek pipelines consume 60 to 70 per cent more energy to keep them running than their western counterparts, so the whole Uzbek gas transportation system has been forced to carry lower volumes than was initially anticipated.”



An expert from Urgenchtransgas, one of the companies responsible for the upkeep of the Central Asia-Centre and Bukhara-Ural gas pipelines, says the problems are not just technical, “Incessant checks by the prosecutor’s office which is investigating a criminal case against a former director upset all the schedules for network regulation and repair work. I think it will be impossible to increase the gas supply volumes in the short term.”



Pipeline investment worth two billion US dollars from Russia and China this year may improve the situation in the future.



However, NBCentralAsia energy-watchers in Tashkent warn that the country may become over-reliant on outside investors if it does not make an effort to modernise its gas extraction facilities and pipeline networks by itself.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)