Trilateral Gas Union: A Mirage or Reality?
Starting March 1, Russian Gazprom will begin exporting gas to Uzbekistan via Central Asia–Center pipeline in reverse mode. The start date of deliveries to Kazakhstan is still under discussion.
Russia, which reduced gas export by a quarter last year after the imposition of an embargo by EU countries, is deploying export to the southeast. At the end of November last year, after a bilateral meeting in Moscow between the leaders of Russia and Kazakhstan, Vladimir Putin and Kassym-Jomart Tokayev, the Kremlin announced a joint initiative of the so-called Trilateral Gas Union between Russia, Kazakhstan, and Uzbekistan. In January, it became evident that despite the politicized statements of some Central Asian officials, practical work on the creation of a Gas Union had begun.
On January 24, Uzbek Energy Minister Zhurabek Mirzamakhmudov and Head of Gazprom Alexey Miller signed a Roadmap for cooperation in the gas industry. According to the press service of the Russian company, during the meeting, the parties "considered current and emerging issues of cooperation."
The Uzbek side gave more details. "The Roadmap provides for the supply of natural gas to the domestic market in the required volumes while fully preserving ownership rights to Uzbekistan's existing gas transportation system (with full management rights). In this case, there is no threat to either the gas transportation system or our sovereignty," the Ministry of Energy of Uzbekistan said in a communique.
The pipes remain Uzbek
Earlier, sources in the oil and gas industry of Uzbekistan reported that initially Moscow offered to supply Russian natural gas in reverse order through Kazakhstan via the Central Asia–Center pipeline (CAC), subject to the transfer of the gas transportation system of Uzbekistan to the management or ownership of Gazprom. The second condition that Moscow put forward was to cede the rights to export Uzbek gas to China. In this case, Gazprom would become a party to the export contract instead of UzGasTrade. In early December, the Energy Minister, Mr. Mirzamakhmudov, said that the government was negotiating the import of gas and electricity "from neighboring countries, and not through any alliance or union." He stressed that Tashkent "is ready to cooperate via a commercial contract, purchase and sale, and not through the transfer of its energy networks."
The January energy crisis, when Tashkent almost froze without gas in abnormally cold weather after emergency shutdowns of the gas pipe from Turkmenistan, made the Uzbek side much more accommodating in the negotiations. In addition, gas production in Uzbekistan, which has proven reserves of 2 trillion cubic meters (a figure doubtful among experts), is decreasing annually. The country can produce about 70 bln cubic meters of gas per year, but due to the depletion of reserves, technological losses, and the lack of an effective control system, the production of commercial gas has significantly decreased in recent years. In 2022, gas production in the country fell by 4% compared to 2021, to 51.7 bln cubic meters. According to Uzbek officials, in 2023, the country can produce 56.3 bln cubic meters of natural gas.
At the same time, Uzbekistan has contractual obligations to export gas to China and, over the years of independence, has built several large gas chemical plants that also need raw materials. Freezing temperatures showed the vulnerability of dependence on one exporter – Turkmenistan.