The agreement provides for natural gas exploration in the Bukhara-Khiva region located in southwest Uzbekistan, as well as geologic exploration of the Kungrad Block located in the Ustyurtsk region. The production sharing agreement (PSA) was signed for 35 years.
The production sharing ratio is 50:50 at the first stage of the project. The maximum annual production rate for natural gas will amount to 11 billion cubic meters, with production peak expected in 2012 to 2013.
During the three years that the PSA has been in place, seismic surveys, production well drilling and production facilities construction have been carried out in the Khauzak gas field.
Activities aimed at drilling over 160 production wells and constructing over 1,500km of pipelines, 40km of railways and a gas processing plant with a capacity of over eight billion cubic meters of gas per annum are to be implemented as part of Kandym-Khauzak-Shady-Kungrad project. To date, over $350 million has been invested into Uzbekistan’s economy within the framework of the project.
