Tashkent, Uzbekistan (UzDaily.com) -- Russia continues to search for new partners and is developing new routes for the export of natural gas, which has been abandoned in Europe. In less than a month, from 1 March, Russia may start supplying gas to Uzbekistan. Does this mean that the idea of a tripartite gas union, proposed at the end of last year by the President of Russia, is becoming a reality, TASS reported.

On 24 January, Gazprom and the Uzbek Ministry of Energy signed a roadmap for cooperation in the gas industry. A week before, a similar road map was signed by the Russian holding with Kazakhstan.

Commenting on the signing of the roadmap, the head of the Ministry of Energy of Uzbekistan Jurabek Mirzamakhmudov said that first the technical possibilities would be studied, then negotiations would be held on the price, and if everything worked out, then Uzbekistan would start buying gas. However, the chain of actions announced by the minister implies a process that can stretch for months. Meanwhile, Uzbekistan needs gas immediately, moreover, the expected date for the start of supplies has already been announced - 1 March 2023.

Where will the gas go?

Gas to Uzbekistan will most likely come from the Yamal fields, experts say. From there, it will enter one of the lines of the Central Asia-Center gas pipeline system (MGP), which is a Soviet gas pipeline system built in the 60s–80s of the last century, through which gas was supplied from Turkmenistan through Uzbekistan and Kazakhstan to Central Russia  In total, the MGP consists of four lines with a total capacity of 50 billion cubic meters per year. One of these lines is supposed to be reconfigured to reverse and send gas in the opposite direction to the Soviet one. However, the infrastructure built half a century ago really needs to be checked and, if necessary, upgraded.

According to experts, we can talk about the pumping of several billion cubic meters annually. This, of course, will not even close to ccompensating for the “European” losses, but the matter may not be limited to deliveries to Uzbekistan.

Why does Uzbekistan need Russian gas?

Uzbekistan has its own gas reserves. Moreover, for a long time he himself acted as a seller of fuel, supplying it even to Russia. So, back in 2019, Gazprom purchased 4.9 billion cubic meters from the republic. But in recent years, Uzbekistan’s own production has been declining, in 2022, 51.7 billion cubic meters were produced, of which 46.4 billion went to domestic needs, and another 4 billion were exported to China. At the same time, the country’s energy needs are growing, and the local gas transportation infrastructure is no longer able to provide them on its own. True, so far the gas shortage in Uzbekistan is seasonal and is felt mainly in winter. This winter, for example, turned out to be abnormally cold in Central Asia, and as a result, Uzbekistan temporarily suspended gas exports to China and was even forced to close (or at least limit) the operation of gas filling stations in some areas. In December, the country signed a contract with neighbors from Turkmenistan for the supply of 1.5 billion cubic meters in three months. But this solved the problem only partially, since in mid-January (in the very cold) Turkmenistan suspended deliveries for nine days due to the formation of hydrate plugs in pipelines.

According to Vyacheslav Kulagin, head of the Energy Market Research Department of the Russian Academy of Sciences, Uzbekistan is ready to continue buying Turkmen gas and switch to Russian gas. It all depends on its price. At the same time, according to the expert, Russia will also be interested in the Uzbek gas market only if the price is comparable to other export routes. However, the same applies to the interests of other suppliers. “Turkmenistan has an alternative – export to China, so it doesn’t need to lower the selling price,” he says.

Business ties between Russia and Uzbekistan are closer than it might seem at first glance. Russia, for example, ranks first in the number of joint ventures created in Uzbekistan. Several milestone projects for an Asian country are being implemented with the direct participation of Russian corporations, including state ones.

“It all depends on how the consumption process will develop in Uzbekistan itself,” explains Stanislav Mitrakhovich, a leading expert of the National Energy Security Fund and the Financial University under the Government of the Russian Federation. - The President of Uzbekistan has already said that he sees the country’s future in stopping gas exports altogether and spending only on its own consumption. The question is whether he will have enough gas or whether he will want to remain in the chain of countries that supply gas to China. Then cooperation with Russia will be in demand.”

In turn, Vyacheslav Kulagin is confident that Russia’s benefits from gas supplies to Uzbekistan will depend solely on the terms of the contracts. “If the benefit is minimal, then the upcoming deliveries will turn out to be nothing more than a seasonal decision. The energy market of Uzbekistan, of course, is growing, but at a rather low pace. It cannot be said that even in ten years there will be a need for additional 10, let alone 20 billion cubic meters.”

Nevertheless, Uzbekistan remains the most populous country in Central Asia by a wide margin. About 36 million people live in the republic, and, for example, in neighboring Kazakhstan, whose territory is six times larger, only 19 million live. Such a population opens up new opportunities and markets for domestic entrepreneurs. “The population is large, you can come up with options for cooperation. Including increasing parallel imports through Uzbekistan,” argues Stanislav Mitrakhovich.

On the way to union

At the end of last autumn, it became known about Russia’s proposal to create a "tripartite gas union" with Kazakhstan and Uzbekistan. The union is commercial, without political conditions, with the main goal of coordinating the transportation of gas from Russia through the territory of Central Asia. However, later it became known that joint activities may include the processing and supply of gas to new markets.

First of all, to China. “Taking into account the already planned projects, deliveries can reach 100 billion cubic meters per year,” Deputy Prime Minister of the Russian Federation Alexander Novak said in an interview with TASS at the end of the year.

In Kazakhstan, the idea of a union was treated with interest, while in Uzbekistan it was skeptical. At least in public space. Jurabek Mirzamakhmudov announced in early December that Uzbekistan intends to import gas strictly under contracts, and not "through an alliance or union." A month and a half later, Russia signed gas road maps with both Kazakhstan and Uzbekistan. However, according to Vyacheslav Kulagin, so far this is only a strengthening of bilateral relations. “The union is something more serious, it involves more global schemes for working in the markets, and not just a matter of supplying raw materials,” he said.

“There is a movement towards a conglomerate, but there are big doubts about calling it a kind of “union,” adds Stanislav Mitrakhovich. - Such a name will rather scare them away, they will not want to draw too much attention to the projects. But regarding the conclusion of agreements and the formation of cooperation, yes.”