Uzbekistan agrees with Korea to pay $1 billion of debt for gas production

Uzbekistan and South Korea have settled the payment of Uztransgaz's debt for the supply of natural gas from the Surgil field, Argus Media reports.

The Uzbekneftegaz subsidiary had to pay for gas produced by the Uz-Kor Gas Chemical joint venture in dollars. At the moment, it has accumulated approximately $1 billion in debt.

As the report notes, the reason for the delay in payments was fears of increasing foreign currency shortages. According to the Ministry of Economy and Finance, the devaluation of the Uzbek soum also created problems.

The first debts in favor of the gas field developers were accrued in 2017. Six years later, a repayment plan was agreed upon, although its details were not disclosed.

Uz-Kor has been developing Surgil since its establishment in 2007. Equal shares of 50% in the joint venture are owned by Uzbekneftegaz and a consortium of three Korean companies – Lotte Chemical, GS E&R and state-owned Kogas.

According to the company, 3 billion cubic meters of gas and 115 thousand tons of gas condensate are produced annually at the field. The latter is mainly processed at the Ustyurt gas chemical complex, which was also built by Uz-Kor in 2015.

The annual capacity of the complex is 387 thousand tons of polyethylene and 83 thousand tons of polypropylene, part of which is exported. The plant can also produce 102 thousand distillate and 8 thousand tons of pyrolysis oil, which is processed at the Bukhara Oil Refinery.