TASHKENT
Uzbek-Russian joint venture Jizzakh Petroleum LLC signed an agreement with Russia’s Gazprombank, the State Development Corporation VEB.RF and the Russian Agency for Export Credit and Investment Insurance (EXIAR) to finance the construction of a new gas chemical complex in the Bukhara region, Uzbekistan’s Energy Ministry said.
The agreement paves the way for $800 million financing at the initial stage, as well as the insurance of the risk related to the facility. It was signed on the sidelines of the Annual Economic Forum in St. Petersburg.
Jizzakh Petroleum is an investor in the project, which has a construction cost of $2.8 billion. The complex is expected to use domestic raw materials and produce export-oriented gas chemical products with high added value. When put into operation, the new olefin plant is expected to process 1.5 billion cubic meters of natural gas and produce 720,000 tonnes of high-quality polymers per year.
“The methanol to olefins project, on which our team has been working for about two years, is an illustrative example of modern Uzbekistan, where great attention is paid to projects to create chains of finished products with high added value,” Nigara Ibadova, Strategic Development Director of Jizzakh Petroleum, said in a statement. “The project will become the core of the future gas chemical cluster, which will be assigned the status of a special economic zone, and this will be the first such experience in Central Asia,” she added.
After decades during which it viewed foreign investment as a threat, Uzbekistan is on a path to reforming its economy and opening it for business. President Shavkat Mirziyoyev, who succeeded Islam Karimov, who had led the country since before the Soviet breakup, after his death in 2016, has made attracting foreign investors one of his top priorities.
Gazprombank already pledged to help finance the construction of two major chemical fertiliser plants in the Central Asian country in a separate agreement reached at the St Petersburg forum with Ferkensco Management Ltd, an international company registered in Cyprus. The plants, both intended for the production of complex mineral fertilisers, will be built in Uzbekistan’s Syrdarya and Samarkand regions.
Jizzakh Petroleum was formed in June 2017 as part of Uzbekistan’s intent to undertake various large-scale exploration, construction and modernisation projects in the energy sector. It owns operating rights to 104 oil fields in Uzbekistan.