Gazprom strikes deal on gas supply to Uzbekistan

Russia’s Gazprom has signed a contract for the supply of natural gas to Uzbekistan, the company announced on June 16, with shipments potentially ranging between 4-10bn cubic metres per year, according to the Moscow-based Vedomosti business daily.

Uzbekistan and other Central Asian countries have been grappling with gas supply shortages in recent years, with a spike in heating demand last winter prompting governments to ration energy and cities suffering blackouts. Under the agreement signed at the St Petersburg International Economic Forum (SPIEF) last week, Gazprom will begin exporting gas to Uzbekistan via Kazakhstan in the fourth quarter of 2023, to provide the country with gas next winter.

Gazprom and Uzbekistan also signed a roadmap agreement on preparing the Central Asian country’s gas transmission system for receiving and transporting Russian gas. Gazprom also struck a deal with Kazakh company Qazaqgaz on gas transit.

Russia’s premier gas exporter is scrambling to find new markets for its gas after losing most of its market share in Europe over the past year. The company’s pipeline gas exports to non-CIS countries – Europe, Turkey and China – almost halved in 2022 to less than 101 bcm. As a result, it cut its gas production by a fifth that year to 412.6 bcm.

Gazprom’s supplies to Europe have dipped even further this year, averaging less than 64mn cubic metres per day in the first week of June, compared with just under 83 mcm per day in December of last year.

Russia is also pushing for the creation of a so-called Gas Union with Uzbekistan and Kazakhstan, and Moscow is thought to be pushing for control of transmission infrastructure in the two countries in return for gas supply.

Previously, Uzbekistan used to supply Russia with gas, with supplies amounting to 4.9 bcm in 2019. They subsequently ceased, as Russia expanded its own gas production capacity and demand dropped in Europe as a result of the COVID-19 pandemic, meaning that it had no need for Uzbek supply.