UZBEKISTAN - Gas To The Far East

As an alternative or in addition to the CentGas/CAOP project, Uzbekistan could tie into the proposed 2,900 km oil pipeline from Kazakhstan to the Xinjiang Uyghur Autonomous region and north-western China. The project is being studied by the state-owned China National Petroleum Corp. (CNPC), which is developing major oilfields in Kazakhstan. This is to be extended eventually to reach the Yellow Sea and supply major areas in China (see OMT).

Mitsubishi Corp of Japan has completed a feasibility study this year on a 6,700 km gas pipeline from Turkmenistan, Uzbekistan and Kazakhstan to China, South Korea and Japan. The project could cost more than $6 billion. An initial study on the project was done in 1994 by Mitsubishi, Enron and the state-owned China National Petroleum Corp. (CNPC).

Tashkent has guaranteed to supply 5 BCM/year gas for this pipeline. But the bulk of the throughput would be supplied by Kazakhstan and Turkmenistan.

Another option is for the gas to reach the Chinese coast on the Yellow Sea, and there to be liquefied and shipped in LNG form to Japan and South Korea. The cost of the whole system then could reach over $12 billion.

Mobil, Marubeni and the World Bank have promoted a rival project from Turkmenistan to China, to pass through Afghanistan and Pakistan. The gas would be supplied to the three countries. This is one of several projects promoted by a number of companies.

Marubeni, the biggest investor in China among Japanese companies, signed a protocol with the Uzbek government in May 1993 to co-operate in the oil and gas sectors. Its executives were lured in by President Karimov who had been receiving visitors in Tashkent from several Japanese companies. It was said later that Marubeni might become involved in one of the E&P blocks on offer. Under the agreement, Marubeni was to help promote Uzbek oil and gas worldwide as well.

(As part of that accord, Marubeni and Chiyoda Corp. won a letter of intent in June 1993 to submit to Uzbekneftegaz feasibility studies on the construction of two new refineries in Uzbekistan, each estimated to cost about $500 million. Financing was to be arranged through the US and Japanese export- import banks. It was then reported that one refinery, with a capacity of 100,000 b/d, would process light oil. The other plant, to be built later, would process heavy oil. Equipment was to be supplied by the two companies. Marubeni and Chiyoda were to form an international consortium).

Petronas of Malaysia was in 1994 asked by the Turkmen government to become involved in promoting a 12,000 km trans-Asian gas pipeline, which would be the longest in the world.