US firms seek opportunities in Uzbekistan
Thursday, May 24, 2018
US multinationals have struck a raft of energy deals with Uzbekistan, following a state visit by Uzbek President Shavkat Mirziyoyev to Washington last week.

Mirziyoyev, who took office in 2016, has sought to strengthen Uzbekistan’s economic ties with the outside world, following over a quarter century of isolationism under his predecessor Islam Karimov. His three-day stay in the US marked the first official visit by an Uzbek president to the country since 2002.

According to Uzbek state media, engineering group General Electric (GE) signed an agreement with Uzbekistan’s national energy concern Uzbekenergo for the construction of a combined-cycle gas turbine (CCGT) unit at the Tashkent thermal power plant (TPP). The two sides also agreed to create a working group to study options for the effective use of high-ash coal in power generation.

The Uzbek energy ministry outlined plans in late April to install an extra 10 GW of power capacity by 2030. Current national supply is estimated at over 12.5 GW, with TPPs accounting for almost 90% of the total.

GE also signed a memorandum of understanding (MoU) with state oil company Uzbekneftegaz on the modernisation and expansion of Uzbekistan’s gas transport system. In addition, the pair entered into a co-operation pact on the creation of a service centre to localise the maintenance and repair of GE turbo machinery. The US firm also agreed to help audit gas compressor and turbine equipment belonging to Uzneftegazdobycha, an upstream subsidiary of Uzbekneftegaz.

Meanwhile, Texas-based super-major ExxonMobil signed a letter of intent (LoI) with Uzbekneftegaz to assist in the production of base oils at the Fergana refinery in eastern Uzbekistan. The deal outlines Exxon’s potential role as a technology licensor and equipment supplier for the project.

US conglomerate Honeywell signed a MoU with Jizzakh Petroleum to license its technology for a new refinery under development in eastern Uzbekistan. The plant, due online in 2021, is anticipated to produce 3.7 million tpy of motor fuels, 700,000 tpy of aviation fuel and various other products. Its launch is aimed at helping Uzbekistan alleviate its frequent fuel shortages.

Honeywell also struck a MoU with Uzbekneftegaz on the licensing of technology to produce olefins from methanol, as well as separate documents on improving gas processing and collaborating in the use of supervisory control and data acquisition (SCADA) software.
 
Changing times
The US entered into a strategic pact with Uzbekistan following the terrorist attacks of September 11, 2001, with NATO forces using the country as a staging area for operations in neighbouring Afghanistan.

But relations between the pair soured after Tashkent’s massacre of protestors in Andijan in 2005. Responding to Western condemnation of the clampdown, the Uzbek government expelled US servicemen from an airbase in Karshi-Khanabad.

Mirziyoyev, who assumed the presidency after Karimov’s death in September 2016, has looked to mend ties with Washington, offering new investment opportunities to US firms.

“We have been able to sign contracts and agreements with the leading US companies worth US$5 billion,” Mirziyoyev said, after what he described as an “historic” meeting with US President Donald Trump. However, as demonstrated above, many of these deals were non-binding. Tashkent’s focus now will be on working to finalise them.
 
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