CEE & Central West Asia: Best Individual BRI Project or Initiative in the Region 2020
Silk Road Fund and Uzbekneftegaz’s natural gas project
Located at the heart of Central Asia, Uzbekistan is a key pillar along the Silk Road. Chinese officials appear to have realized its strategic importance more than 2,000 years ago, when trade relations between the two countries were first established.
It was no surprise that Uzbekistan was one of the first countries to support and participate in the Belt and Road Initiative.
As the region’s most populous country, its potential for industrial development is huge, particularly now as it enters a new era of economic development.
A critical natural gas project in the former Soviet republic wins our award for best BRI project in the region this year, thanks to the importance of that industry for the country and the longer-term impact it can have on the BRI.
There are numerous elements to the gas project, called the New Silk Road Oil and Gas JV LLC, which was first initiated through an Uzbek government resolution in December 2015.
The main aim of the project is to build, and boost, hydrocarbon production at gas fields in the country.
To back an increase in hydrocarbon production, China’s state-owned investment vehicle Silk Road Fund signed a cooperation agreement with Uzbekneftegaz, the sole state-owned holding company for Uzbekistan’s oil and gas industry, in June 2018.
As part of that agreement, Silk Road Fund signed a $600 million-equivalent dollar and renminbi loan with Uzbekneftegaz in July 2019, with the first tranche allocated in October. The loan came with a guarantee from the Uzbek ministry of finance.
The project is on a strong footing. The initiative includes 16 gas wells, of which seven were existing and nine are newly drilled wells. As of June 2020, total gas production had hit 1.375 billion cubic metres and daily production reached 1.415 million cubic metres.