Uzbek Gas in Short Supply

Tuesday, 5 February, 2019

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IWPR Central Asia

Institute for War & Peace Reporting

It’s Sunday morning and Rakhim, his wife and their two young sons are sitting in front of the heater having breakfast. In the winter months, to save money, the whole family use one room as kitchen, dining room and bedroom.

The Gujbogtepa mahalla, or neighbourhood, in Navbakhor village in the Navoi district has no centralised gas supply system. Rakhim, who works in a print house, is his family’s only breadwinner and the family has no money to heat the house properly during cold weather.

“The pipes have been laid, yet they are useless, many of them have rusted,” he said. “In 2009, when we had just moved here, there was a gas supply. However, it was soon reported that the system didn’t have enough pressure and the gas supply company cannot supply gas to our mahalla.”

Rakhim and his family are driven to desperate measures just to keep warm.

“Every winter we need to buy coal, which costs 273,000 soms (33 US dollars) per tonne plus 1,000 soms (12 dollars) for delivery,” he explained. “But it requires firewood to burn coal, which is a problem. One cart [of firewood] costs 700-800,000 sums (84-96 dollars), but you can hardly buy it. Just like other residents of the mahalla, we cut down fruit trees.”

Although Uzbekistan is estimated to have nearly a third of all mineral reserves in Central Asia, and is among the top 20 countries worldwide by gas production, many citizens struggle to access enough fuel to heat their houses during the winter.

In 2018, the country’s total natural gas production around about 61 billion cubic metres, 5.2 billion cubic metres more than in 2017. But according to national gas supplier Uztransgaz, nearly a third of the population has to warm their homes with coal and firewood.

Problems with gas supply begin just a few kilometres away from regional centres. Since 2001, gas delivery has been suspended to the areas of Markaziy Surhon, Kunchikish and Porlok Yulduzi in the Dzharkurgan district of Surkhandarya region, home to over a thousand families.

The gas cylinders that are used instead are in short supply during the winter, and can only be recharged once every two months even though each one lasts just two weeks. Moreover, prices are rising; one gas cylinder used to cost around 7,000 soms (less than a dollar) to recharge, but now costs almost 17,000 (two dollars).

In the centre of Angor district, residents say that supplies are so inconsistent that at best they can cook use their cookers for an hour in the morning and the evening.

People have to buy gas cylinders and heat houses with electricity, which

is uneconomical. To cut costs, people often cook meals on an open fire. Coal supplies are often interrupted and in some areas of the country have not been delivered all winter.

Many Uzbeks feel that the government has increased fuel exports at the expense of local consumers, although state gas company Uzbekneftegaz denies this and says it cuts off the pipeline transporting fuel abroad if domestic needs require it.

Deputy chairman Odil Temirov told reporters on November 29 last year that only 15-17 per cent of the total volume of gas production was exported.

OPEC data shows that in 2017, Uzbekistan exported about 18 per cent of their gas to other countries, down from about 20 per cent in 2016.

Hydrocarbon production in Uzbekistan has significantly declined over the last decade, partially explaining the interruptions in gas supply to the population. Many of the main pipelines and distribution networks, built in the 1960s or 1970s, have deteriorated resulting in significant losses. The infrastructure also cannot handle the increased demand due to population growth.

According to Goskomstat, the office for national statistics, in the first six months of 2018 the number of people increased by nearly 250 to 32.9 million people.

Between 2009 to 2016, almost 70,000 residential houses were built in the country’s villages. Cities are growing too. More than 190 high-rise buildings were commissioned in 2017, and there are plans for a further 1,236 apartment complexes to be built by 202

To meet these greater needs, Uzbekistan is planning to implement 38 projects which will increase gas production by 53.5 billion cubic metres by 2020.

Uzbek president Shavkat Mirziyoyev announced at a November 20 meeting that a long-delayed 1.6 billion dollar project to modernise the main pipeline network and to control gas flows (SCADA) was to be implemented.  

In 2010, Uzbekneftegas signed a deal with a Chinese company to partially implement this system, but terminated the contract in 2012. According to Uzbek officials, SCADA will be complete by 2021 with direct investment from major international companies.

The state has also started to gradually replace worn-out facilities and build new pipelines to increase capacity, as well as repairing the low-pressure networks that supply gas to domestic consumers. 

However, industry specialists note that it makes little financial sense to install a costly gas pipeline to a remote village with only 50 residents. They hope that supply issues can instead be eased by the introduction of energy-saving and efficient technologies and supplies of liquefied gas cylinders.

“According to our estimates, the number of consumers using liquefied gas will increase by 20 per cent in the next ten years,” a Uzbekneftegaz spokesperson said. “However, we are planning to double the supplies [of liquefied gas]. This is the task set by the government. It will surely affect the volumes of supplies to NGV [natural gas vehicle] refill stations. Supplies to NGV refill stations will be reduced due to the increase in the liquefied gas supplies to the population.”

One cubic metre of natural gas supplied to consumers with residential gas metres now costs 320 sums (three cents) which from June 1, 2019 will rise to 350 sums (four cents) due to increasing production and delivery costs.

Without a residential gas metre, each cubic metre of gas will cost 553 sums (six cents) with subsequent increase in June 2019 up to 605 sums (seven cents).

As for liquefied gas cylinders, since November last year each kilo costs 950 sums (ten cents) and will rise to 1,200 sums (14 cents dollar) from June.

Despite this price rise, Uzbekneftegaz said that they still do not even cover costs of 610-615,000 soms (73 dollars) per thousand cubic metres. This means that rates will continue to increase.

The government has trialed introducing gas and electricity consumption rates so as to more effectively distribute supplies around the country. They are trialing an automated system of natural gas measurement (ASKUG) in the Kibrai district of Tashkent region, where 200 meters have been installed in a pilot neighbourhood to monitor all gas consumption online for the next four years. If successful, ASKUG will be rolled out throughout the country.

In addition, a revised tariff was introduced in the Yunusabad district of Tashkent January 1. As consumers use an average of about 200 cubic metres of gas each month, the basic consumption rate per consumer is set at 250 cubic metres. For private houses and flats heated individually, the rate is 1,000 cubic metres in the colder months.

If consumers exceed their limit, they pay a higher tariff. This trial period will last until July 1. If successful, this system will be launched throughout Uzbekistan.

Sitting with his family in front of their sole heater, Rakhim says he is ready to pay more to guarantee a more regular supply of gas rather than relying on coal and firewood during the winter.

“My acquaintances in the regional centre pay nearly 200,000 sums (24 dollars) per month for gas in the autumn-winter period,” he said. “They have a big house, where two families live. Six rooms are heated with gas-fired furnaces. There is a steam bath and two gas stoves in the kitchen and on the summer porch.

“Sometimes they complain about the rise in prices. I wish I had their problems."