17 June 2004 08:48
LUKOIL TO SELL UZBEK GAS TO GAZPROM
TASHKENT. June 17 (Interfax) - Russian oil major Lukoil will sell to Gazprom the natural gas that it plans to produce
in Uzbekistan during the implementation of the Kandym-Khauzak-Shady project under a production sharing agreement, Lukoil
President Vagit Alekperov told journalists.
He said that agreement on this has already been reached with Gazprom.
Alekperov said that the Uzbek side agreed to increase the Lukoil
share from the previously agreed 70% to 90%, as Lukoil will take on
responsibility for all investment, which will amount to about $1
Alekperov said that during the first stage of the project, Gazprom would buy gas to be resold either on the Russian
market or abroad.
Lukoil will own 90% and Uzbekneftegaz 10% of an operating company that will deliver the project, he said.
billion.
The share of production will depend on the profitability of the project and will fluctuate "from 50% to
80%," Alekperov said.
The first phase of the Kandym-Khauzak-Shady project will be launched in 2007, when commercial gas production will
begin.
Uzbekistan's national oil and gas company Uzbekneftegaz on Wednesday signed a production-sharing agreement (PSA)
for the estimated $1-billion Kandym-Khauzak-Shady project with Russia's Lukoil.
Uzbekneftegaz Chairman Abdusal Azizov and Lukoil President Vagit Alekperov signed the deal, under which the partners
will produce natural gas at the site in the Bukhara-Khiva region of southwest Uzbekistan.
The PSA will last 35 years and anticipated capital costs are $1 billion. Commercial gas production is due to start in
2007.
An Uzbekneftegaz source said the property contains a proven 283 billion cubic meters (bcm) of gas. Kandym, the
biggest of the fields, holds more than 150 bcm. Production will peak at around 9 bcm annually and the project should
yield 207 bcm in all.
A modern gas-chemicals complex able to process 6 bcm of gas per year will be built. The first stage should be
launched in 2010.
In addition, more than 240 production wells will be drilled and more than 1,500 km of pipeline laid.
Two compressor stations will be built, as will high-voltage power transmission lines, gas collection points,
workers' villages, a 40-km rail track, roads and spur tracks.
The project involves the creation of many jobs and contracts for Uzbek organizations.
The gas will reach markets via the trunk pipeline system operated by Russia's Gazprom.
Uzbekneftegaz subsidiary UzLITIneftegaz drafted the feasibility study and U.S. law firm Baker & McKenzie the
PSA.
Uzbekneftegaz signed a 15-year PSA with Gazprom at the end of April to develop the Shakhpakhty gas condensate field
in the Ust Yurt district of Uzbekistan. Gazprom pledged $15 million of direct investment between 2004 and 2007.
It is anticipated that Uzbekneftegaz will sign a second PSA with Gazprom to develop condensate fields in the Ust Yurt
region by the end of 2004. It is thought the second project will cost around $1 billion.
[Interfax] |
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