Faced with dwindling gas sales to Europe, Russia has been re-routing its stranded gas reserves to countries like Uzbekistan, where infrastructure for pumping gas is already in place. This renewed cooperation presents both a problem and an opportunity for Tashkent.
A flurry of recent bilateral meetings demonstrates that the Kremlin has been encouraging – or dictating – the pace of discussions with Tashkent on increasing Russian natural gas exports. On April 27, during the second Tashkent Investment Forum, Uzbek Energy Minister Jurabek Mirzamakhmudov announced that Russia would supply gas to Uzbekistan via the Soviet-era Central Asia-Center gas pipeline network. Mirzamakhmudov further noted that both parties are currently calculating the costs for the construction of compressor stations, facilities that help the transportation of natural gas from one location to another, and are required for the reverse pumping of gas through the pipeline. Further details of the plans have not been disclosed. While revenue from gas sales to Uzbekistan and onward to China is not enough to make up for the lost energy sales to Europe, Moscow has been putting pressure on this new route in an attempt to keep its gas moving.
The Logic Behind Russia’s Energy Relationship with Uzbekistan
History is necessary if we are to understand the current thinking of Putin’s energy interactions with Uzbekistan. The obvious reason for Russia promoting energy ties with Uzbekistan is because the export infrastructure is already in place, albeit with a serious need for upgrades and modernization. Currently, there are three gas pipelines running through Uzbekistan: two of which are Russian, dating back to the Soviet era. Namely, these are the Central Asia-Center pipeline network and the Bukhara-Urals pipeline. The third is Chinese, the Central Asia-China pipeline, a 3,666-kilometer gas pipeline that begins at Gedaim, on the Turkmenistan-Uzbekistan border, and ends at Khorgos, in China’s Xinjiang region.
This is also not the first time Uzbekistan has imported gas from Russia. It is important to note that prior to 2022, Uzbekistan was already importing some gas from Russia. In 2020, Gazprom began supplying Turkmen gas to Uzbekistan and reported that in 2020, 0.9 billion cubic meters per annum were supplied and this increased in the first quarter of 2021 to 1.5 billion cubic meters per annum.
The Kremlin’s approach to energy relations with Uzbekistan is deeply intertwined with how it views the Central Asia region as a whole. Thus, the Kremlin’s energy policy thinking has two aspects. On a more symbolic level, by selling gas to Uzbekistan, Russia is represented as a guarantor of peace, integrity, and stability in its near abroad, as proven by its support of the Uzbek energy crisis. On a more strategic level, Uzbekistan is seen as a vehicle for promoting Russian interests, in this case, enabling Russia to exploit the gas infrastructure network with China.
Not a New Issue
The Kremlin’s focus on gas sales to Uzbekistan is not new. Putin’s approach to Uzbekistan in the realm of energy is in line with his overall foreign policy strategy for the region. Since coming to power in 2000, he has placed emphasis on establishing transport and energy trade with the energy producers of Central Asia, namely Uzbekistan, Kazakhstan, and Turkmenistan. This was epitomized in Putin’s early speeches describing Central Asia’s “advantage on the scale of global economic competition.” Talks about Russian gas exports to Uzbekistan go back to 2002 when Putin announced plans to create an integrated Eurasian gas space. With that Putin hoped to control the “volumes and directions” of gas exports in the region.
Since then, the Kremlin has made various attempts to push the pace of discussions with Tashkent on energy cooperation. In November 2022, talk of a gas union between Kazakhstan, Uzbekistan, and Russia was brought up by Putin during a discussion with the president of Kazakhstan, Kassym-Jomart Tokayev. Key points discussed were the transport of Russian gas to Kazakhstan and Uzbekistan with the prospect of a further sale to China, Pakistan, and India. However, in December 2022, Uzbek Energy Minister Mirzamakhmudov publicly denounced the offer and expressed that Uzbekistan was not consulted beforehand. In addition, he stated that Uzbekistan “would not agree to political conditions for obtaining natural resources,” but only on a commercial basis could such a possibility arise. Subsequently in December 2022 and early January 2023, a series of negotiations followed between Gazprom, the Russian national oil and gas giant, the Kremlin, and the presidents of Uzbekistan and Kazakhstan.
The proposed gas plan would see Russian gas transported to Uzbekistan via Kazakhstan through the Central Asia-Center pipeline. This would involve developing technology and infrastructure to allow for the reverse pumping of gas from Russia to Kazakhstan and then onward to Uzbekistan. This is because this pipeline has traditionally been used to deliver gas the other way. Since it first became operational in 1967, gas in the pipeline would go to Russia from Turkmenistan via Uzbekistan and Kazakhstan. Planning documents for these initiatives make reference to upgrading various aspects of infrastructure but do not describe specific projects or supply output.
Why is it Important?
For Uzbekistan, additional gas from Russia is welcome as the country has increasingly experienced shortages of gas. This has been mainly due to the rapid growth in domestic consumption and declining output, which have made it difficult for Uzbekistan to meet both its domestic needs and to follow through on its gas export obligations to China. This concern was specifically expressed by Uzbekistan during the negotiations with the Kremlin. The talks also coincided with the severe energy crisis in Uzbekistan from December 2022 to early January 2023 which triggered local protests and highlighted the urgency for the country to make up for its shortfalls in gas supply.
And if history serves as a preview, gas shortages have often been a precursor for social unrest and instability in the region. With that in mind, Uzbekistan views the current gas supply challenge anxiously with the fear that it could snowball into something more. As for exporting, the plan is to definitively stop pumping gas out of Uzbekistan altogether. In 2022, Uzbek Prime Minister Abdulla Aripov announced that Uzbekistan planned to stop selling gas to foreign buyers by 2025. At the moment, its main export partner for gas is China. Tashkent had previously fallen short on its export obligations to meet domestic demand which wasn’t pleasantly received in Beijing.
Shared Concerns and Dependency
Russia and Uzbekistan’s energy relationship today can be characterized by shared concerns and dependency issues. On the one hand, Uzbekistan needs an immediate gas supply to satisfy increasing domestic demand and cover for declining output. On the other hand, Russia hopes to redirect its stranded gas exports and sell to Asia more broadly.
Considering the changing geopolitical dynamics and the Kremlin’s doubling down on its efforts on expanding energy trade with Uzbekistan, Tashkent should remain cautious. There are many ways Uzbekistan can thread this needle, but three options stand out. Firstly, Uzbekistan can leverage its negotiating position and put pressure on Moscow to get a good deal for Russian gas supplies. Secondly, in the long term, Uzbekistan must further explore and develop its own domestic oil and gas deposits and establish benchmarks of energy consumption for all energy-intensive sectors. This will ensure that the Russian gas supply will not constrain Uzbekistan’s competitiveness and prevent the country from becoming dependent on a single supply source. Thirdly, Uzbekistan should take advantage of its relationship with China by prioritizing joint infrastructure projects in the energy sector.
So despite Russia upping the ante on the gas trade, Uzbekistan still has cards it can play. While Tashkent policymakers can see this as an opportunity to meet its gas obligations both at home and abroad, it needs to be mindful of the dangers of accepting Kremlin support. As always, the long view remains crucial.
Uzbekistan-Russia Energy Relations: A Tale of 2 Problems
Source: Frappler
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