Notes on Energy Issues in Central Asia

Energy Issues in the Republic of Kazakhstan

“Outlook for Kazakhstan’s Gas Industry” www.gasandoil.com/news/central_asia/d7a4a7664b794131307475da6af8667f:

• The pipeline system in Kazakhstan was built by the Soviets for export to Russia, Ukraine, & the Caucasus. This means that only towns directly on the pipelines are served by domestic gas supplies, w/ imports used as a major source of heating.
• Much of the far north & the southern areas around Qyzyllorda and Almaty, are dependent on Russian or Uzbek imports respectively. The Uzbek imports can cost twice to three times as much and are sporadic.
• New pipelines are being built to meet Russian demand, mostly funded by Gazprom or CNPC.
• Kazakh pipelines and refineries lose an abnormally large amount of gas due to poor maintenance, something that it is not paying attention to. Instead the gov’t builds fancy new pipelines.

“Kazakhstan: international energy data and analysis” www.eia.org/beta/international/analysis_includes/countries_long/Kazakhstan/kazakhstan.pdf:

• Current production is at 1.7 million barrels per day, mainly from the Tengiz, Karachaganak, and Kashagan fields.
• In 2012, coal accounted for 63% of all energy production. Natural gas makes up 16%, oil makes up 10%, and hydroelectric power 3%.
• Oil reserves are estimated at 30 billion barrels, or enough for 48 years at current extraction rates.
• State interests in oil and gas are represented through the state-owned company, KazMunaiGaz. It controls from 10% to 100% equity in gas and oil projects (with 10%, 16.8%, and 20% in the Tengiz, Karachaganak, and Kashagan fields respectively).
• All gas and oil projects must meet certain standards of using local materials and labor or be terminated.
• Main law governing fossil fuel resources is the “Subsoil and Subsoil Use Law”, which allows gov’t the right to preempt any sale of gas or oil assets. It has invoked this law in the past to prevent CNPC from gaining controlling shares in an oil project.
• Kazakhstan has oil export duties, which were introduced in 2010.
• The Tengiz and Karachaganak fields collectively make up half of all oil and natural gas production in Kazakhstan.
• Kazakhstan exported almost 1.4 billion barrels per day of crude oil, with over 75% heading to Europe – mainly Russia and Ukraine – and roughly 16% heading to China.
• This means that 82% of oil is exported, with the rest used for internal consumption mainly in heating.
• Kazakhstani pipelines, including those for exports, are handled by the state-owned companies KazTransOil and KazTransGaz, both state owned subsidiaries of KazMunaiGaz.
• Kazakhstani exports also use tankers to cross the Caspian, connecting to oil networks in Azerbaijan and Southern Russia. Rail systems are used for domestic transport of gas and oil.
• Kazakhstan has a refinery capacity of 345,000 barrels per day, served by 3 facilities operating at under half capacity. The facilities are in Pavlodar, Atyrau, and Shymkent.
• Pavlodar deals primarily w/ Russian oil whereas the Atyrau and Shymkent refineries serves domestic supply. Pavlodar is also the most efficient plant, and represents half of all processing capacity.
• These refineries currently met 70% of Kazakhstan’s domestic gasoline and diesel supply, but with expansion and modernization this should increase to 100% by 2017.
• Kazakhstan produces 1.6 trillion cubic feet of gas a year. 90% of this supply comes from the Karachaganak and Tengiz projects.
• Kazakhstan has 85 trillion cubic feet of natural gas, or 2,400 trillion liters. This enough for 53 years at current extraction rates.
• Tengiz field has an on-site processing plant and the creation of a similar facility is planned for Karachaganak field, but now the gas from that field is processed in Orenburg.
• Kazakhstan has 37,038 million tons of recoverable coal.
• A quarter of Kazakhstani coal is exported, with almost all of that going to Russia. The remaining 75% of coal is used domestically.
• 83% of Kazakhstani electricity is generated by coal-fired power plants concentrated in the North of the Republic. 13% is generated by hydroelectric plants. 4% is generated by natural gas.
• The hydroelectric power is generated from station along the Irtysh river in the far Northeast. It is the only place in Kazakhstan with the landscape to accommodate dams without flooding.
• Kazakhstan closed down their last nuclear reactor in 2001 under widespread anti-nuclear sentiment. There have been serious discussions about reopening a nuclear power plant, since domestic opposition is now lessened.
• Although distribution of energy and maintenance of infrastructure is governmental, power production is largely handled by private enterprise.

“TengizChevOil” www.tengizchevoil.com/about/overview:

• Tengiz field is operated by TengizChevOil, a conglomerate of Chevron, ExxonMobil, KazMunaiGaz, and LukArco (holding 50%, 25%, 20%, and 5% stakes respectfully). The field is operated by Chevron. It claims to run a fairly tight operation and invests in local communities.
• LukArco is wholly owned by LukOil, a firm closely connected with the Russian state.

“Karachaganak” www.kpo.kz/en/about-kpo/parent-companies.html:

• Karachaganak field is jointly operated by BG Group and Eni SpA (each holding a 29.5% stake), with investments by Chevron, LukOil, and KazMunaiGaz (holding 18%, 13.5%, and 10% respectively).
• BG Group is a British company with a poor record in meeting its social and environmental obligations.
• Eni SpA is an Italian company with spurious relationships with corruption, but a clear environmental and social record.

“North Caspian Operating Company” www.ncoc.kz/en/ncoc/co-venturers.aspx:

• Kashagan offshore field will be developed by the “North Caspian Operating Company (NCOC)” a state firm constructed for the purpose of collecting revenue for the construction and operation of the facilities.
• The NCOC is composed in unknown proportions of KazMunaiGaz, Eni SpA, Royal Dutch Shell, ExxonMobil, Total, CNCP, and Inpex.
• Royal Dutch Shell is a Anglo-Dutch company, ExxonMobil is an American company, and Total is a French company. All have a history of cooperating with and participating in local corruption and abuse.
• CNCP is a Chinese state-owned enterprise representing Chinese interests in Kazakhstan.
• Inpex is a Japanese firm with a relatively clean social and environmental record.

“KazTransOil” www.kaztransoil.kz/en/about_the_company/main_pipelines_scheme/:

• Main oil pipelines head North to Samara or Omsk. Another large pipe goes to Alashankou, China. Very few populated Eastern areas are reached by pipelines.

“KazTransGas” www/kaztransgas.kz/index.php/en/main-page/business-map:

• Main gas export pipes carry gas to Russian Urals or to China. Most domestic need in Western Kazakhstan is met by these pipelines, but gas for other areas depends on Uzbek or Kyrgyz imports.
• Although Kazakhstan is currently working on gas infrastructure that will connect Almaty and Astana to main pipelines.

“Kazakhstan Electricity Grid Operating Company” www.kegoc.kz/en/company/national-power-system/:

• 4% of electricity came from gas, implying that the majority of domestic gas usage is for heating.
• Full list of the major power plants in Kazakhstan, including hydroelectric, gas, and coal-powered  plants, as well as rules on the function of energy markets in Kazakhstan are available at: www.kegoc.kz/en/power-industry/kazakhstan-electric-power-industry-key-factors/

“Kazakhstan 2050 Strategy” strategy2050.kz/en/news//category/152:

• Kazakhstan’s development plan focuses on increasing efficiency of energy usage and production, promoting energy independence, and developing “green energy”. “Green energy” is mainly defined as hydroelectric plants where they can be built, and wind and solar power facilities elsewhere.

“Uranium and Nuclear Power in Kazakhstan” www.world-nuclear.org/info/Country-Profiles/Countries-G-N/Kazakhstan/:

• Kazakhstan has around 12% of the world’s uranium, but accounts for 38% of global uranium production.
• The state-owned company Kazatomprom is in charge nuclear energy production, uranium extraction, enrichment, and processing. Kazatomprom directly operates 5 uranium mines, while the other 12 are operated by private enterprises.
• Kazatomprom has had a number of deals with Russian companies, providing enriched fuel for Russian reactors.
• Similar agreements have also been reached with Japan, China, and India. Often fuel is provided in exchange for technical expertise in the enrichment process or with designing nuclear reactors for Kazakhstan.
• In 2014, 55% of all Kazakhstani uranium exports were headed to Chinese reactors.
• The largest private investors in mining operations are Cameco and Uranium One. All businesses seem to purchase controlling stakes in a single mine, rather than holding stakes in multiple operations.
• Cameco is a Canadian company, seems to have a good record in a number of other mining operations.
• Uranium One was originally a Canadian firm purchased by a Rosatom subsidiary for its mining technical expertise and is entirely controlled by the Russian government. They operate at least 4 mines.
• After a sulfuric acid shortage in 2009 led to processing shortfalls, Kazakhstan has started to produce the majority of the processing-related materials domestically.
• From current estimations, Kazakhstan does try to minimize the environmental impact of uranium mining.
• There is a chance that Kazakhstan will produce uranium for its own reactors soon with promise foreign assistance in developing experimental reactors. Reactors are planned for the Caspian coast around 2019, and talks on ongoing about another reactor serving Almaty.
• Kazakhstan has been successful in properly storing nuclear waste from decommissioned Soviet reactors, meaning it can likely handle nuclear facilities and their byproducts in the future.

“Karachaganak and Kazakhstan’s Oil Policy” http://cacianalyst.org/publications/analytical-articles/item/13302-karachaganak-and-kazakhstans-oil-policy.html:

• In the past Kazakhstan has used its right to preemptive purchase of shares to establish rentier situations in profitable oil sites.
• More importantly, it has also rewarded Chinese firms with shares purchased with this right and then resold. It is unclear whether this is demonstrative of corruption or a Kazakhstani belief that Chinese investment is in its national interests.
• Kazakhstan has not been manipulating shares as much as before, allowing foreign investment w/o the normal levels of interference. This may signal a change brought on from diminishing options due to a global downturn in oil prices.

Additional Source: www.oxfordenergy.org/wpcms/wp-content/uploads/2010/11/NG25-KazakhstansgasExportMarketsandExportRoutes-ShamilYenikeyeff-2008.pdf 

Energy Issues in the Kyrgyz Republic

“Kyrgyzstan: International Energy Data and Analysis” www.eia.gov/beta/international/country.cfm?iso=KGZ:

• In 2013 , the Kyrgyz Republic produced a little over 0.021 quadrillion BTUs of coal, or around 840,00 short tons of coal a year.
• Total recoverable coal is estimated at 895 million short tons, meaning that at current rate of extraction, coal should be depleted in 1,065 years. Coal supplies will not be an issue in the immediate future.
• Natural gas production is functionally non-existent.
• In 2014, the Kyrgyz Republic produced 0.002 quadrillion BTUs of oil, or around 470,311 barrels a year.
• This is not enough to meet domestic demand, resulting in a necessary petroleum importation of approximately 292,000 barrels a year.
• At present total energy consumption stands at 0.25 quadrillion BTUs, whereas energy production is at 0.154 quadrillion BTUs, leaving a shortfall of 0.096 quadrillion BTUs a year.
• The charts indicate that much of this deficit is made-up from importation of foreign coal, natural gas, and especially oil.

“Law of the Kyrgyz Republic On Energy (No. 56) ”

cbd.minjust.gov.kg/act/view/ru-ru/663:

• The default state of all energy resources in the Kyrgyz Republic is state ownership.
• All development of energy resources, however, is the responsibility of private persons and enterprises.
• Operators and providers of energy are required to compensate consumers for any environmental or infrastructural damage.
• Companies do not seem to have any requirements to invest in either local goods or labor.
• Rights and licenses to distribute electricity can be revoked if the distributor fails to provide regular services.

“Law of the Kyrgyz Republic On Renewable Energy (No. 283)” cbd.minjust.gov.kg/act/view/ru-ru/203243:

• The Kyrgyz Republic supports renewable energy and provides economic incentives for its development.
• The Kyrgyz Republic seems to recognize the severe issues with its electricity network and supports solar power development as an off-grid alternative to unreliable central power in rural areas.

“Law of the Kyrgyz Republic On Oil and Gas (No. 77)”

cbd.minjust.gov.kg/act/view/ru-ru/85:

• The Kyrgyz Republic reserves the right to ban gas or oil export from the Republic for up to 6 months.
• Regional and local government is given discretionary power in allotting the land for development and ensuring worker safety.
• No corporate responsibilities to local communities are detailed in the requirement for licensing.
• Export of oil, gas, or petroleum products must be given to a private third party unrelated to the operator.
• The Kyrgyz Republic has to approve the sale of all exploitive rights and licenses, as well as the transfer or sale of titles to a third party.
• The Kyrgyz Republic has a priority right to purchase all exports or gas, oil, or petroleum products intended for sale. The government must be informed of any sale or export at least a month in advance.
• The Kyrgyz Republic also reserves the right to seize products as legal tender in cases of failure to pay debts.
• The government of the Kyrgyz Republic has the right to supersede gas or oil field use for a variety of reasons if determined necessary by the state.

“Law of the Kyrgyz Republic On Subsoil (No. 160)”

cbd.minjust.gov.kg/act/view/ru-ru/203760: 

• All subsoil resources are property of the Kyrgyz Republic and can be distributed by the government in accordance with Kyrgyz law.
• All plots of subsoil turned over for development must be auctioned if multiple buyers are available. On the discretion of the Kyrgyz state they may also be distributed by tender or direct negotiation.
• If multiple offers are received, the plot or deposit must be auctioned.
• Developers of subsoil deposits are expected to invest socially and economically in nearby communities, and their ability to do so factors into the review and auction process.
• This is a requirement for deposits designated “nationally important”, and the specifics and implementation are left to local or regional governments.

“IEA Energy Atlas: Coal” energyatlas.iea.org/?subject=2020991907:

• Annual coal production in the Kyrgyz Republic is roughly 0.42 Mtoe, and has been stable following a precipitous drop after independence.
• This is equivalent to 4.88 trillion Wh (TWh) of energy production.
• The Kyrgyz Republic imports 0.62 Mtoe of coal a year, much more than it produces.
• Maybe 60% of coal is used outside of electricity production, likely in heating and domestic use such as cooking.

“IEA Energy Atlas: Oil” energyatlas.iea.org/?subject=-1920537974:

• The Kyrgyz Republic produces very little oil, so little that it is functionally insignificant next to domestic demand. Demand has also been increasing, reaching 1.66 Mtoe (19.31 TWh) a year in 2014.
• 80% of all transportation is powered by oil and petroleum products, with the remainder likely either newer electric trains or older coal-fired trains.

“IEA Energy Atlas: Renewables” energyatlas.iea.org/?subject=-1076250891:

• Production of renewable energy has remained largely constant in the Kyrgyz Republic at 1.22 Mtoe (18.188 TWh) per annum.
• Renewables, mainly hydroelectric, make up 70% of energy production for the Kyrgyz Republic, increasing to 93% of all electricity generation.
• The discrepancy is likely the result of an oil-driven transport sector and the prevalence of coal heaters in rural areas.

“IEA Energy Atlas: Natural Gas” energyatlas.iea.org/?subject=-1165808390:

• Like oil, the Kyrgyz Republic produces almost no natural gas, covering under 5% of domestic demand.
• The Kyrgyz Republic consumes 0.36 Mtoe (4.187 TWh) of natural gas per annum, with almost all of this being imported.
• Around 20% of natural gas imported goes towards electricity production, meaning that the vast majority is likely used for heating and other domestic purposes.

“IEA Energy Atlas: Electricity” energyatlas.iea.org/?subject==1118783123:

• Total energy production in the Kyrgyz Republic is 15.17 TWh per annum.
• This means that renewables account for ~92% of electricity generation, with ~4% from coal-fired plants, and ~5% from gas-fired plants.

“Ministry of Energy: Subordinated Organizations” energo.gov.kg/ru/minsterstvo/podvedomstvennye_struktury/:

• Energy production and distribution in the Kyrgyz Republic, across all fields ranging from electricity to heating, is organized within a shadowy network of joint-stock companies.
• Most of these companies only exist in the form of a name and a government registration number. No information about their operations, management, investors, or ownership is available.
• Unlike elsewhere, they are not centrally organized. Instead some responsibilities are centralized and others are given to regional companies.
• E.g., Electricity distribution is centralized for the Republic, but it does not have jurisdiction or mandate in most provinces, where the same services are provided by regional joint-stock companies.
• Although electricity distribution and heat are convoluted, gas, coal, and hydroelectric infrastructure are much more centrally organized.
• Resource extraction and processing is much more centrally managed than distribution and transportation.

“Elektricheskie Stantsii” www.energo-es.kg:

• Elektricheskie Stantsii (Energo-es) is a joint-stock company that maintains Kyrgyz hydroelectric infrastructure, and is responsible for generating 98% of all national hydroelectric energy.
• This means that Energo-es is responsible for ~91% of all electricity in the Kyrgyz Republic.
• Although some aspects of the company – namely the state-owned energy retailer Kyrgyzenergo – are mainly government owned (93.5%), Energo-es itself and mainly large hydroelectric projects have powerful and prominent foreign investors.
• Apparently investors include companies in France, Austria, Germany, Japan, S. Korea, and India. Names of specific companies are not mentioned.

“Verxne-Narynskie Gidroelektrostantsii” narynhydro.kg/o-kompanii.html:

• Since 2012, Russia has been helping the Kyrgyz Republic construct several dams on the upper Naryn River.
• The Naryn River is a major tributary of the Syr Daryo, and construction will certainly flare international tensions with Uzbekistan.
• The dams are jointly operated by Energo-es and RusHydro with each party having a 50/50 share in the venture.
• The dam complex’s total capacity is at 237.7 MW, which – using the Hoover Dam as an example for capacity-to-watt-hours production – means that roughly 534.83 million Wh (.0005 TWh) will be produced per annum.
• This amounts to a minimal increase in national energy production, despite the size of the dam complex.
• RusHydro is controlled by a majority stake held by the Russian government. It is unknown how many other hydroelectric projects in the Kyrgyz Republic are owned or operated by  RusHydro.

“KyrgyzKomur” kyrgyzkomur.gov.kg:

• KyrgyzKomur is the state-owned Kyrgyz coal company responsible for all coal production and distribution. Its main goal is to supply coal to heating companies in Bishkek and the provinces, especially during winter.
• There appear to be two active coal fields in the Kyrgyz Republic: Kara-Keche (Kavak) field, and Tashkomurskogo field.
•  A coal “consortium” has been created for guaranteeing supply. It consists of  KyrgyzKomur, JSC Sharbon, CJSC Bereket, JSC United Kol Company, Cut Busurmanku IT, Ak-Zholkomur, Zhumgalsuukurulush, NarynKomur, Nark Too, Vargas, Yu end Mi Co., Panj Sher, AGK Tooinvest, Demilge, TransAsia Coal Co., Tegene, and Favourite TMK.
• The controlled in the consortium is held by KyrgyzKomur.
• The consortium is entirely of Kyrgyz firms. Three are held as joint stock companies, and 13 as private firms. None have websites, addresses, or any evidence of existence beyond a name and a registration number.
• Many of the companies have been mentioned by name in reports of corruption or poor corporate practice by NGOs or the government.

“KyrgyzGaz” www.kyrgyzgaz.kg:

• KyrgyzGaz is the state-owned gas company responsible for gas procurement and distribution. It is specifically oriented towards maintaining and improving the pipelines. It does not appear to be responsible for gas production.
• More than 80% of KyrgyzGaz is owned by the government.
• It is currently focused on expanding its pipeline network, especially in the N. via a joint project with Kazakhstan to built gas infrastructure along the Kyrgyz-Kazakhstani border.
• This planned project between KyrgyzGaz and KazTransGaz will meet gas needs in the N. Kyrgyz Republic and SE. Kazakhstan near Almaty.
• In the S. and E. of the Kyrgyz Republic, responsibilities held by KyrgyzGaz are devolved to regional sub-companies loosely controlled by the main firm.
• The Kyrgyz Republic produces 850 million square meters of nature gas every year.
• The Kyrgyz Republic is almost entirely dependent on Uzbekistani gas imports, although so far Uzbekistan has kept the price low at $100 per 1,000 square meters of gas. This is around half of prices in Europe.
• Theoretically the Kyrgyz Republic could import Turkmen gas, but it would still require the consent of Uzbekistan for transit through its pipeline network.
• Kyrgyz gas supplies in the N. are jointly managed by a Kazakhstani-Kyrgyz company. This venture constitutes 15% of all gas flow to the Kyrgyz Republic.
• The construction of new pipelines and associated infrastructure is handled by cooperate with Gazprom. There presently exists a possibility that the Kyrgyz Republic will be included in the pipeline network in  Uzbekistan and Kazakhstan, a venture largely controlled by Gazprom.

“Current Projects” energo.gov.kg/ru/dejatelnost/proekty/75:

• The majority of current projects in the energy sector of the Kyrgyz Republic are aimed at improving the monitoring, efficiency, capacity, and provision of services in remote or rural areas. These are funded by development institutions like the World Bank, Islamic Development Bank, Asian Development Bank, and Export-Import Bank of China.
• Most hydroelectric projects are funded by Russian firms, although Swiss investors are also refurbishing an older dam.
• Major Chinese investment is in the gas sector, especially constructing a pipeline to be completed in 2016 between the Kyrgyz Republic and China.

“Uranium in Kyrgyzstan”

www.world-nuclear.org/info/Country-Profiles/Countries-G-N/Krygyzstan/:

• The Kyrgyz Republic does not actively supply uranium, but several companies have been given licenses to explore and extract rare earths – including Uranium – from mines and tailings.
• Most of the companies operating are Russian or Chinese.
• There is still one functional uranium processing facility near Bishkek, known as Kara Baltinski Processing Combine (KBPC). It does not mine, but it still develops tailings from old Soviet mines.
• It was given a contract to process some products from E. Kazakhstan.
• The majority shareholder in KBPC is a Russian firm, Renova, with strong connections to the Russian state. It is working to improve the facility’s capacity.

“Bishkek denounces agreement with Moscow on power plants” http://www.cacianalyst.org/publications/field-reports/item/13332-bishkek-denounces-agreement-with-moscow-on-power-plants.html:

• In 2012 Russia signed a deal committing two state-owned firms, Inter RAO and RusHydro, to aiding in the construction of the 1,860 MW Kambar-Ata-1 dam in the Kyrgyz Republic.
• Despite the Russian government pledging $720 million of the $3 billion project, only $37 million has been invested so far. The report of the former Justice Minister, Almambet Shykmamatov, however, indicates that only $5 have been invested rather than embezzled.
• Due to lack of investment, caused by a severe shortage of Russian capital, the Kyrgyz government has cancelled the Russian development contract.
• The Kyrgyz have promised to find a new investor within 6 months, but the Iranians, Indians, and Chinese all seem uninterested in the unprofitable and controversial project.

Energy Issues in the Republic of Tajikistan

“Tajikistan: International Energy Data and Analysis” www.eia.gov/beta/international/country.cfm?iso=TJK:

• As of 2012, Tajikistan produced 0.164 quadrillion BTUs of energy, but consumed 0.198 quadrillion BTUs of energy.
• Estimated coal supplies are at 413 million short tons, meaning that at the current rate of extraction, Tajikistani supplies could last 654 years.
• The annual recovery rate of 632,000 short tons of coal is roughly 0.01 quadrillion BTUs.
• The country produces functionally no gas or oil.
• Tajikistan consumes under 0.008 quadrillion BTUs of coal, along with 0.031 quadrillion BTUs of oil, and 0.008 quadrillion BTUs of gas.

“Zakon Respubliki Tadjikistan O Nadrax (No.984)”

mmk.tj/ru/legislation/legislation-base/1994/:

• All subsoil and associated assets are the sole property of the Tajikistani state, and may be given to government agencies or their rights of use may be sold to companies. No private ownership of subsoil resources can ever exist, however.
• Significant power for subsoil resource exploitation in their region has been given to the executive officials of Gorno-Badakhshan.
• The state has significant discretionary powers to control mineral extraction activities, without protocol on what constitutes a termination or nationalization-worthy offense.
• All organizations or persons with subsoil rights are treated equally regardless of citizenship, expect for nuclear companies – which must by law be registered in Tajikistan.
• The government must prevent monopolies and hold an auction or competition for development of a site.
• Companies and mine operators are responsible financially and criminally for the safety of their workers, nearby populations, and the environment.
• There is a finder’s fee granted by the state in return for discovery of a hereto undiscovered mineral resources. The state still, however, retains property rights for the subsoil deposits.
• Fees for subsoil use can be paid in cash,  volume of extracted substances if requested by the government, execution of services by company staff on behalf of Tajikistan, or direct contributions to budget.

“Zakon Respubliki Tadjikistan Ob Energetike (No. 123)”

mmk.tj/ru/legislation/legislation-base/2000/:

• The government is prohibited from favoring joint-stock companies or state-owned enterprises over other kinds of energy companies or visa-versa.
• Any state-owned energy asset including mineral, oil, or gas deposits, production or processing facilities, or pipelines can be transferred or sold to a business on terms decided by negotiation.

“Zakon Respubliki Tadjikistan Ob Ispolzovanii Atomnoy Energii (No. 69)” mmk.tj/ru/legislation/legislation-base/2004/:

• This law domestically enforces the conditions of the Semipalatinsk Treaty.
• It deals with preventing irradiation and guaranteeing safety in the use of nuclear power and materials. All up to IAEA standards and guidelines.
• There are no controls on the import or export of materials pertaining to nuclear energy other than those subsequently created by the legislature.
• To date the only relevant agreement is the Semipalatinsk Treaty.

“Zakon Respubliki Tadjikistan Ob Ispolzovanii Vozobnovlyaemyx (No. 587)” mmk.tj/ru/legislation/legislation-base/2010/:

• Renewable energy is defined as solar, wind , hydroelectric, geothermal, and biomass production.
• The focus on renewables is to create a decentralized energy system, for the explicit purpose of providing power to areas not connected and unfeasible to connect to main power grid.
• Renewable energy can be integrated and used, or not, at the discretion of the power network operators.
• The state is mandated, however, to prevent unfair competition from conventional energy providers and their allies.
• The tax incentives and “other benefits” are given for investment in renewable energy sources and/or infrastructure. Technical assistance will also be provided.
• The state might be responsible for the pricing of all electricity or just subsidies the price of renewables. The wording is unclear, but the state does make sure that electricity prices to consumers are uniform regardless of energy source.

Additional Source: “Zakon Respubliki Tadjikistan Ob Energosberejenii i Energoeffektivnosti (No. 1018)” mmk.tj/ru/legislation/legislation-base/250/

Additional Source: “Zakon Respubliki Tadjikistan Ob Obrashchenii s Radioaktivnymi Otxodami (No. 1002)” mmk.tj/ru/legislation/legislation-base/250/

“Zakon Respubliki Tadjikistan O Nefti i Gaze (No. 1190)” mmk.tj/ru/legislation/legislation-base/271/:

• Oil and gas fields and resources are the exclusive property of the state. The rights to extract or develop these resources can be temporarily rented out by the government.
• Contracts for development can be a maximum of 5 years before review and extension is required.
• The company extracting or developing is responsible for restoring the environmental conditions, but no mention is made for social or economic development requirements.
• Ownership of pipelines and associated infrastructure can only be transferred with the approval of the government.

“Energy Atlas: Coal” energyatlas.iea.org/?subject=2020991907:

• Tajikistan uses ~0.19 Mtoe (2.21 Twh) of coal every year. Over 95% of this coal is produced domestically, and the potential error is large enough that Tajikistan can be considered to be self-sufficient in coal production.
• Tajikistan does not use any coal to generate electricity, indicating that all of the coal must go towards heating or transportation.

“Energy Atlas: Oil” energyatlas.iea.org/?subject=-1920537974:

• Tajikistan consumes 0.56 Mtoe (6.5 Twh) per annum of oil. Only 5% of this, or 0.03 Mtoe (0.35 TWh), is produced domestically.
• All of the domestic crude production is refined domestically.
• Oil only power 17% of transportation, meaning that either – somehow – Tajikistan has electric trains or they still largely depend on coal-fired trains for transport.

“Energy Atlas: Renewables” energyatlas.iea.org/?subject=-1076250891:

• Tajikistan produces 1.45 Mtoe (16.86 TWh) of energy every year through renewables. This is almost entirely made up of hydroelectric power.
• This makes up 87% of all energy production, and a full 100% of all electricity generation.

“Energy Atlas: Natural Gas” energyatlas.iea.org/?subject=-1165808390:

• Tajikistan consumes 0.12 Mtoe (1.4 TWh) of gas per annum. It produces under 10% of this domestically.
• Gas consumption has been continuously declining since independence, possibly indicating diversification of heating or electrical sources, or simply prohibitively high prices following the breakup of the USSR.
• 17% of gas in Tajikistan is used for electricity, which is a large decline from the ~50% used before 2007. This still amounts to practically nothing compared to electricity produced through hydroelectric sources.
• 2007 also marks a huge decline in consumption and import of gas. This is likely due to a souring of relations with Uzbekistan.

“Energy Atlas: Electricity” energyatlas.iea.org/?subject=-1118783123:

• Tajikistan’s total electricity generation is 16.97 TWh a year, almost entirely from renewables represented by hydroelectric power.

“Energy Atlas: Energy Indicators” energyatlas.iea.org/?subject=-297203538:

• Total Tajikistani energy production is 1.67 Mtoe (19.4 TWh) per annum.
• Although Tajikistan is entirely self-sufficient in electricity, it is entirely dependent on gas and oil for heating and domestic use.
• Strangely, the apparent presence of coal-trains means that most industrial transportation can be powered through domestic resources

“Ministry of Energy and Industry of the Republic of Tajikistan” www.minenergoprom.tj:

• Tajikistan’s main energy project is Rogun Dam on the Vaxsh River, a tributary of the Amu Daryo. It will increase electrical capacity by 13.1 TWh, almost doubling the electricity produced in Tajikistan.
• The dam is expected to damage Uzbekistani cotton harvests and cause drought. It is a point of severe international tension.
• Sangtuda-1 and Sangtuda-2, both on the Vaxsh River, are being built. They are funded by Russia and Iran respectively.
• China is currently funding the construction of 2 large power transmitter lines that will connect North-South and Kulob-Dushanbe.
• Deposits of oil and gas are currently being developed by an open joint-stock company, Sug’neftugaz, Papmakunii Chanuby, Salosa, Azizy, Hasan & S., and Shohon.
• Most firms listed are Tajikistani and without any records or documentation besides a name or government reference number.
• The joint-stock company is composed of Gazprom, Kulob Petroleum LTD, Marvis PTE LTD, EDGO, Solomon Oil, and Petroleum Sug’d.
• Within these firms, Gazprom, Kulob Petroleum LTD, Solomon Oil, and Marvis PTE LTD are the big players in Tajikistani energy markets.
• Gazprom is a Russian firm with strong connections to the Russian state.
• Kulob Petroleum LTD is a subsidiary of British oil company Tethys Petroleum. The company exclusively operates in the former USSR and has murky governance and a history of corruption.
• It is responsible for gas recovery in SW Tajikistan. It sells shares in the operation to CNODC and S.A. Total.
• Marvis PTE LTD is a Singaporean company specializing in cotton production. It recently diversified into the oil industry.
• They have operations in SW Tajikistan and Xujand.
• EDGO is a British oil and gas firm operating in most of the Middle East, run by a Palestinian family. No record of prominent or consistent corruption.
• Solomon Oil is a joint-stock company overwhelmingly (90%) controlled by MNP Petroleum, a Swiss firm. It operates in Xujand.
• Petroleum Sugd is controlled by Energy Partners Austria (EPA), though 40% is still state owned. EPA is now, as of 2012, controlled by Swiss company MNP Petroleum.
• The operate in the Xujand area, just like MNP Petroleum’s other subsidiary.
• Electricity infrastructure is currently being build between Tajikistan and Afghanistan by an American firm.

                                        

Name	Location	Size (short tons)
Shurob	Xujand	300 million
Fon-Yagnob	Xalton	900 million
Sayyod	Vaxdat	3.4 million
Ziddiy	Dushabe	5.5 million
Miyonadu	Gorno-Badakhstan	675 million
Hakimy	Dushanbe	42 million
Ravnov	Gorno-Badakhstan	179 million
Nazar-Ayloq	Dushanbe	450 million

Table 1: This shows coal fields within Tajikistan. They are organized by name, location within the Republic, and the size of the deposit in short tons. Ownership of any coal mines or production is unknown.

“Country’s Natural Gas Network is Handed Over to TojikTransGaz’s Operational Control” news.tj/en/news/country-s-natural-gas-network-handed-over-tojiktransgaz-s-operational-control:

• Gas pipelines in Tajikistan are controlled by TojikTransGaz, including the Tajikistani side of all international pipelines. They had been restructured, but they never left state control.
• Uzbekistan currently charges Tajikistan $311 per square meter for gas, more than twice the average price in Europe and three times the price Uzbekistan charges to the Kyrgyz Republic. Gas is being politically leveraged by Uzbekistan against the Tajikistani government.

Energy Issues in the Republic of Turkmenistan

“Turkmenistan: International Energy Data and Analysis” www.eia.gov/beta/international/analysis.cfm?iso=TKM:

• Despite vast oil and gas reserves, Turkmenistan is not a major player or exporter because of bad or nonexistent infrastructure. Infrastructure is, however, being built with Russian and Chinese investment.
• Energy consumption in Turkmenistan consists of ~80% natural gas, with the rest being accounted for by petroleum products.
• Electricity is produced almost entirely through natural gas and generates ~22 billion KWh per annum.
• This greatly exceeds domestic needs and is exported to Central Asian countries over a shared electric grid, as well as Afghanistan, Iran, and Turkey.
• The government is currently in the process of building 14 more gas-fired power plants – presumably for exporting electricity.
• Turkmenistan has 600 million barrels of oil, which at the current rate of extraction will last for only 7 more years!
• Foreign companies are prohibited from owning land in Turkmenistan, meaning that all production and extraction takes place in partnership with TurkmenGaz or TurkmenNebit, the state-owned gas and oil companies respectively.
• The main foreign companies operating in Turkmenistan are CNCP, Dragon Oil, Eni SpA, and Petronas.
• Dragon Oil is an Emirati company operating an offshore field near Hazar. It is 51% owned by Emirites National Oil Company (ENOC).
• Petronas is the Malaysian state-owned oil company.
• CNPC is the largest investor, having secured more rights than anyone else. It is also constructing a pipeline for oil and gas exports to China.
• Turkmenistan has two refineries, Seydi and Turkmenbashi, one in Turkmenat near the Uzbekistani border and one near the coast. They have a combined capacity of 287,000 barrels per day, enough to process all extracted oil, but they run at around 50% capacity, meaning that large amounts of crude are exported for foreign processing.
• The refineries are not well connected domestically. Turkmenbashi is connected to Caspian reserves and export lines to Uzbekistan, Russia, Iran, and Azerbaijan. Seydi is connected to inland reserves and exported lines to Shymkent, Kazakhstan. The pipeline networks are not connected.
• Turkmenistan has natural gas reserves of 265 trillion cubic feet. At the current rate of extraction, reserves could last over 100 years.
• Presently annual extraction is roughly 2.5 trillion cubic feet of gas. This is expected to increase to between 3.5 trillion and 4.5 trillion cubic feet per annum with the development of the Galkynysh field near Merv.
• Right now the main impediment to greater exports is lack of pipeline infrastructure, hence the importance of Chinese investments and projects in infrastructure.
• Turkmen gas reserves are concentrated in the E near Kerki, in the SE near Marv, and on the Caspian shore.
• Turkmenistan has been developing petroleum product industries, meaning that most chemicals needed for fossil fuel extraction and processing are manufactured domestically.
• Russia has been a declining importer of Turkmen gas and oil in recent years, leading to the establishment of China as Turkmenistan’s premier investor and business partner.
• China imports 1.5 trillion cubic feet of natural gas a year, accounting to around 60% of all production. Most of the rest goes towards Russia, Iran, or domestic use.

Additional Source: energyatlas.iea.org/?subject=2020991907

Additional Source: energyatlas.iea.org/?subject=-1076250891

“Energy Atlas: Gas” energyatlas.iea.org/?subject=-1165808390:

• Turkmenistan produces 56.22 Mtoe of nature gas per annum, whereas it only consumes 19.69 Mtoe per year.
• This means that 65% of all Turkmen gas is exported, with the rest being used domestically for electricity generation.

“Energy Atlas: Oil” energyatlas.iea.org/?subject=-1920537974:

• Turkmenistan produces 11.81 Mtoe of oil a year, while it consumes only 6.12 Mtoe per annum.
• Oil is also common in heating, as presumably is gas.
• This means that roughly half of all oil is for export.

“Turkmenistanyn Kanuny Elektrik energetikasy hakynda (No. 104-V)” minjust.gov.tm/mmerkezi/doc_view_2lang.php?doc_id=15024:

• The cost of energy is to be determined by the producer or provider based on free market principles.
• Despite this statement, there is no private enterprise allowed in electrical generation and all land and infrastructure associated with electricity generation is state property.
• It may to be determined accord to the principles of the free market, but the actual price is set by the Cabinet of Ministers.
• Energy production and operation is a purely national matter and not subject to local or regional oversight nor interference.

“Preobrazovaniya v Energetike i Industri” www.turkmenistan.gov.tm/?id=1813:

• In 2012, the Soviet successor Ministry of Energy and Industry was split into two separate and eponymous ministries.
• This demonstrates the importance of the energy industry to Turkmenistan, that it must be handled separately.

“Ministry of Energy” minenergo.gov.tm:

• Turkmenistan is currently undergoing an electrification program to upgrade access to electricity in rural areas.
• Turkmenistan exports electricity to Turkey, Iran, Tajikistan, and Afghanistan.
• Energy consumption has been greatly increasing in Turkmenistan in the past decade, likely as a result of more industrial use.
• Turkmenistan has been hard at work upgrading its electrical system to account for surges or seasonal spikes and lows in electric flow. It seems to have a fairly reliable electricity network at this point.

“TurkmenGaz” www.oilgas.gov.tm/neftegazovyj-sektor/item/76-zawod:

• TurkmenGaz is the Turkmen state gas company run by the Ministry of Oil, Gas, and Mineral Resources. It is responsible for exploration, extraction, development, processing, transportation, and sale (both domestically and internationally) of natural gas.
• It has regional subordinate offices, but they are kept on a tight leash.

“TurkmenNefteGazStroy” www.oilgas.gov.tm/neftegazovyj-sektor/item/73-turkmen-nebit:

• This a state-owned company responsible for the construction of all oil and gas infrastructure including storage facilities, pipelines, and refineries. It produces all facilities – including housing – associated with the gas and oil industries.

Energy Issues in the Republic of Uzbekistan

“Uzbekistan: International Energy Data and Analysis” www.eia.gov/beta/international/analysis.cfm?iso=UZB:

• In 2014, total energy consumption in Uzbekistan was around 2.04 quadrillion BTUs.
• Of this, 85% was natural gas, 6% was oil, 5% was hydroelectric, and 4% was coal.
• All oil and gas production had remained nationalized under Uzbekneftegaz. Historically the focus has been on upgrading existing fields to meet domestic demand, not on developing new fields for export.
• Lukoil, Gazprom, and CNPC are the biggest investors in fossil fuels in Uzbekistan.
• Uzbekistan has three oil refineries located in Ferghana, Altyaryk, and Buxoro. The two refineries in the Ferghana Valley are older, while the Bukharan refinery was constructed in 1997.
• The factories can operate at 224,000 barrels of oil per day, but due to the age of the refineries and insufficient domestic production resulting in low inflow, they operate well below capacity.
• Uzbekistan’s sole pipelines connect Turkmenat to Shymkent. Waystops on the transit path allow for some connection to Khivan and Bukharan gas and oil fields. Pipelines also connect the Ferghana and Altyaryk refineries domestically.
• Uzbekistan has switched from a domestic self-sufficiency model of fossil fuel use – where all extraction was performed by Uzbekneftegaz – to encouraging export, joint-ventures, privatization, and foreign investment.
• Limited export options and poor to non-existent infrastructure were the main impediments to more exportation.
• In 2014, Uzbekistan produced 2 trillion cubic feet of natural gas of which 1.7 trillion cubic feet (85%) is consumed domestically.
• Uzbekistan has 65 trillion cubic feet of gas reserves, meaning that at current rates of extraction it will last for over 30 years.
• Uzbekistan has a developed network of storage areas for oil and natural gas, which help make up for lacking exportation and distribution infrastructure.
• Uzbekistan serves as a gas transit country for both Chinese and Russian operated pipelines that go across Uzbekistan carrying Turkmen gas.
• Construction is currently underway to connect Buxoro and Nukus with gas infrastructure in the Ustyurt plateau in Kazakhstan. This will allow Uzbekistani use of Russian export pipelines.
• Of the 300 billion cubic feet of natural gas that Uzbekistan exported in 2014, around half was send to Russia, with the remainder exported to China or Kazakhstan.
• Uzbekistan will be doubling its current exports following the completion of a pipeline to China, as China has requested an additional 350 billion cubic feet of gas a year.

“Uzbekistan Energy/Power Sector Issues Note” www.ekonomi.gov.tr/portal/content/conn/UCM/uuid/dDocName:EK-203124;jsessionid=xpXIFY2tHCp8A-vW4EJISY1ykNFWOntMPmKoDCXMkdDodSnUsjlM!-1132000877:

• Uzbekistan is estimated to have undiscovered deposits much larger than any current discovered total due to a previous policy of non-exploration.
• Coal reserves are estimated at 1.9 billion tons. At the current rate of extraction this is enough for nearly 100 years.
• Gas exports have been greatly increasing following independence, increasing six-fold between 2001 and 2010 alone.
• Energy sector investments account for ~72% of government investment and revenues from such investment – especially in the gas sector – is an important part of the government’s plan to make Uzbekistan a middle-income nation by 2030.
• This is especially important in light of unreliable electricity networks, which are a serious impediment to industrial development.
• The government is prepared for a crunch on oil production and has begun developing systems to replace oil with natural gas in transportation.
• They are also unbundling different aspects of the energy field (i.e., the generation of power is a separate company from distribution) and diversifying export options with new pipelines to China.
• Going forward, the major issues Uzbekistan will face are dependence on gas reserves, lack of renewable energy resources, and lack of electrical reliability in winter.
• Uzbekistan needs to invest in repairing energy infrastructure, especially in transmission. Right now 40% of all generators and transmitters will reach the end of their usable life by 2017.
• Uzbekistan also faces problems with inefficient energy usage, especially in agriculture due to outdated irrigation systems. It is the most energy inefficient country in the former Soviet Union, with power plants running at 40% efficiency and 20% of all produced electricity being lost in transmission.
• So far the government has acquired 3.5 billion USD, around 42% of the total required investment to repair the network.
• Gas is used to generate 82% of all electricity, consuming around 20% of all processed gas.

“Energy Atlas: Coal” energyatlas.iea.org/?subject=2020991907:

• Uzbekistan produces 1.35 Mtoe (15.7 Twh) of coal per year. It neither exports nor imports significant amounts of coal.
• 67% of coal is used to generate electricity. The other 33% is presumably used in heating or domestic consumption.

Additional Source: energyatlas.iea.org/?subject=-1165808390

“Energy Atlas: Renewables” energyatlas.iea.org/?subject=-1076250891:

• Hydroelectric power makes up 20% of all Uzbekistani electricity.

“Uzbekistan Uranium”

www.world-nuclear.org/info/Country-Profiles/Countries-T-Z/Uzbekistan/:

• Uzbekistan is a prominent uranium producer, with most of the production concentrated in the Qyzylqum Desert near Navoiy.
• All uranium mining in Uzbekistan is the undertaken by the Navoiy Mining and Metallurgy Combinat (NGMK), a state-owned company managed by Kyzylkumredmetzoloto.
• Before independence, all uranium was shipped to Russia. After independence, most uranium has been produced by Nukum Inc., a subsidiary of Canadian firm Cameco. Most of this uranium was then shipped to America, Japan, and Europe.
• Significant export deals have also been signed with Kepco and CGN.
• Kepco is the Korean state electric power company.
• CGN is a major state-owned nuclear power firm in S. China. They have stated that Uzbekistan is now second only to Kazakhstan as a source of uranium.
• Uzbekistan has been improving enrichment and processing facilities within the country so that it no longer exports only raw material.
• Two small research reactors are being maintained in Tashkent, but no nuclear power is actively generated.

“Navoiy Mining and Metallurgical Combinat” www.ngmk.uz/en/:

• NGMK effectively funds all schools, hospitals, housing, and all other services in what is otherwise a vast expanse of desert.
• Nearly all equipment, chemicals, and materials associated with uranium and other mineral mining are imported.
• NGMK sells uranium and other minerals to Hitachi, LRS Plannung und Technologie, Nukem Inc., and Siemens. Of these companies, Nukem is by far the largest.
• LRS Plannung und Technologie, and Siemens are German companies with good reputations for transparency.
• Hitachi is a Japanese firm that runs a number of reactors.
• The workers appear to be in a well-organized union.
• NGMK is the only uranium producer in Uzbekistan. They process all product on-site to a processed and enrichable form.
• NGMK is currently trying to become self-sufficient in the manufacture of chemicals needed in mining and processing.
• All operations are in line with IAEA guidelines and the requirements of the Semipalatinsk Treaty.

“O’zbekiston Respublikasining qonuni Er Osti Boyliklari To’g’risida” www.lex.uz/pages/GetAct.aspx?lact_id=75847:

• Qoraqolpoqiston has the right to add additional laws regarding use of subsoil resources, but not to supersede national law – unlike the situation between Tajikistan and Gorno-Badakhstan.
• Subsoil resources are the exclusive and unalienable property of Uzbekistan.
• Local governments are responsible for making sure that all corporations comply with Uzbekistani laws and regulations.
• Landowners and landusers – presumably referring to tenants on collective farms – are allowed to collect subsoil resources like coal for domestic consumption without state interference or regulation.
• All dealings with radioactive materials must comply with the guidelines of the IAEA and the Semipalatinsk Treaty.
• In case of state seizure of mining operations or liquidation of the operating company, all equipment and facilities associated with extraction are forfeit.

Additional Source: www.uzgeolcom.uz/index.php/uz/

Additional Source: www.uzngi.uz/uz/:

“Uzbekneftegaz” www.ung.uz:

• Uzbekneftegaz was originally a gas and oil production company, but now it is responsible for development and processing of resources. It is also empowered to take steps to attract international investment in oil and gas reserves.
• Noted investors in Uzbekneftegaz-operated fields are Gazprom, Lukoil, CNODC, Petrovietnam, KNOC, and SASOL.
• Petrovietnam is the state-owned oil company of Vietnam.
• SASOL is a South African firm will a history of corruption, bribery, and price manipulation.
• Uzbekneftegaz is in turn organized into a number of subsidiaries which specialize in exploration (Uzgeoburneftegaz), development (Uzneftegazdobycha), transit and storage (Uztransgaz), refining (Uzneftemahsulot), capital accruement (Uzneftegazstroyinvest), and infrastructural engineering (Uzneftegazmash).
• They very much are not, however, independent companies.

Additional Source: www.ung.uz/ru/library/docs:

“Joint-Stock Company Uzbekenergo” www.uzbekenergo.uz/uz/:

• Uzbekenergo is responsible for generating all electricity and heat for Uzbekistan. It operates all power plants in the country.
• Uzbekenergo is divided into several regional subsidiaries and service branches. These are being progressively privatized, with all but two current in some stage of the privatization process.
• Power plants exist in Ferghana, Qashqadaryo, Qoraqolpoqiston, Syrdaryo, Tashkent, and Navoiy provinces.
• The Ferghana plant uses oil in the summer and gas in the winter.
• The Qashqardaryo plant uses natural gas.
• The Qoraqolpoqiston plant uses oil, natural gas, and coal.
• The Syrdaryo plant is the largest in all of Central Asia and is powered by natural gas, with a reserve of oil.
• Tashkent has three power plants, which uses natural gas; coal, gas, and oil; and coal, respectively.
• The Navoiy plant uses oil, with a reserve of natural gas.
• Coal reserves are concentrated in Surxondaryo and Qoshqadaryo provinces. At present three deposits are being mined.
• Electricity generation makes up over 85% of coal consumption.
• There are also an unnamed number of thermal power stations located across the country. They are almost entirely powered by oil or natural gas.

Additional Source: www.uzbekenergo.uz/map-network_maxii.jpg

“Coal Industry of the Republic of Uzbekistan” uzbekcoal.uz/en:

• O’zbekko’mir (Uzbekcoal) is responsible for all coal mining operations within Uzbekistan. They are a subsidiary of Uzbekenergo.
• They are also responsible for transporting and distributing mined coal to power plants.
• The equipment being used is badly outdated, having becoming obsolete during the 1970s.
• O’zbekko’mir has an investment section. They are clearly trying to attract investors in specific projects for improving many different aspects of production