Gazprom focuses on Central Asia and China for now

By Rhod Mackenzie

For the first time, Gazprom has provided a detailed overview of its strategy for the Central Asian market. The company intends to enhance its presence in the region over the next 15 years. During the annual gas conference, Gazprom's CEO, Alexey Miller, expressed a willingness to augment gas supplies to Kazakhstan, Uzbekistan and Kyrgyzstan. Additionally, discussions were held regarding new transportation routes, as well as the expansion of existing capacities and gasification. Currently, gas supplies from Russia to these countries are minimal. Nevertheless, analysts predict that by 2030, exports to the region could expand to a potential of 20 billion cubic meters. However, the margins in these markets will be lower than in Europe.
Gazprom will construct new pipeline routes to the markets of Kazakhstan, Uzbekistan, and Kyrgyzstan, whilst also boosting supplies through existing gas pipelines. This is in addition to the Central Asia-Center (CAC) system, according to the company's head, Alexey Miller, who made the announcement on November 1st during his speech at the St. Petersburg International Gas Forum (SPIGF-2023). For the first time, he elaborated on a new proposal for the company’s operations in Central Asia, which was previously not considered by Gazprom as a sales market.

Following supply cuts to Europe in 2022, Gazprom announced its efforts to establish a gas union with Kazakhstan and Uzbekistan, for supplying these nations and facilitating transit to China. In October, gas supplies to Uzbekistan commenced through the CAC in reverse mode, and the countries concurred to export 2.8 billion cubic metres over two years.

According to Alexey Miller, Gazprom aims to boost supplies via the Central Asia Network while also establishing fresh gas transmission capabilities in Kazakhstan.
"In addition to analyzing our plans for the next 15 years as part of the reconstruction of the SAC, we are also examining the current Bukhara-Ural corridor and potential new gas transport routes," explained the senior executive. He further stated that Gazprom is prepared to assist Central Asian nations in achieving gasification.

The senior executive believes that it is "economically efficient and profitable" to explore opportunities for gas supply and gasification to the northern and northeastern regions of Kazakhstan from Russia, including new gas transportation routes for the gasification of Astana. The shared border between the two countries supports this possibility. The senior executive confirms that an ongoing route development project has completed its feasibility analysis.

Alexey Miller stated that the contract for collaborating with Kazakhstan, Uzbekistan, and Kyrgyzstan for the next decade and a half will be prepared by mid-2024.
First Deputy Prime Minister of Kazakhstan Roman Sklyar has announced that Russia and Kazakhstan intend to sign an agreement for the supply of three billion cubic metres of gas annually, with an option to increase the volume. Sklyar informed TASS that the negotiations, which have been ongoing during the SPIGF 2023, are set to continue and a formal agreement will be signed in the coming months.