Uzbekneftegaz: Central Asian countries discussing shared cut in gas supplies to China

Moscow, May 6 - Neftegaz.RU. Central Asian gas producers Turkmenistan, Kazakhstan and Uzbekistan are discussing a shared cut in gas supplies to China, as a result of the coronavirus pandemic's impact on demand, Uzbekneftegaz CEO Mekhriddin Abdullaev told S&P Global Platts.

"China requested a cut, but indicated that any reduction in gas supplies would be carried out proportionally between Turkmenistan, Kazakhstan and Uzbekistan," Abdullaev said. "A coordinating committee of the 3 Central Asian countries that supply gas to China is discussing exact volumes. A decision has not yet been made," he added.

Chinese demand for gas has fallen this year as a result of measures introduced to combat the spread of the coronavirus. In March Kazakhstan said it cut natural gas supplies to China by 20%-25% after PetroChina issued a force majeure notice on imports.

The 3 Central Asian countries ship gas to China via the Central Asia–China gas pipeline network, which has a design capacity of 55 Bcm a year.

Uzbekistan supplies around 10 Bcm/year of gas to China, UNG said. Chinese Customs data indicated that in 2019 Kazakhstan exported 7.1 Bcm, and Turkmenistan 33.2 Bcm.

In the longer term Uzbekistan is planning to reduce gas exports to almost zero over the next decade, shifting its focus to processing gas domestically. Uzbekistan produced around 60 Bcm of gas last year and is planning to ramp up production by 20% by 2030.

"Our main priority is exploration, which will give us a clearer picture of hydrocarbon reserves. We are working on several gas exploration deals with international oil companies, including European majors such as Total and Eni, and the alliance with BP and Socar," Abdullaev said.

He added that the company planned to sign further agreements with BP and Socar on exploration at a field in the Ustyurt region, close to the Aral Sea, in the near future. The companies previously signed preliminary agreements on joint exploration work in the area.