Uzbekistan: UZB: SURGIL NATURAL GAS CHEMICALS

Nonsovereign Project | 44944-014

The project is located approximately 1,300 kilometers (km) from Tashkent in the Ustyurt region of Karakalpakstan, an autonomous republic in northwestern Uzbekistan.

Project Details

  • Project Officer
    Mokroussov, Sergey
    Private Sector Operations Department
    Request for information
  • Country/Economy
    Uzbekistan
  • Sector
    • Industry and trade
Project Name UZB: SURGIL NATURAL GAS CHEMICALS
Project Number 44944-014
Borrower / Company UZ-KOR GAS CHEMICAL LLC
Country / Economy Uzbekistan
Location
Type or Modality of Assistance
2850 Guarantee Ordinary capital resources USD 0.00 Cancelled
2850 Loan Ordinary capital resources USD 125.00 million Committed
Strategic Agendas Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Industry and trade / Industry and trade sector development

Gender Equity and Mainstreaming
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Portfolio Management Division, PSOD
Responsible ADB Officer Mokroussov, Sergey
Project Sponsor(s) Kor-Uz Gas Chemical Investment Ltd.
Uzbekneftegaz
Description

The project is located approximately 1,300 kilometers (km) from Tashkent in the Ustyurt region of Karakalpakstan, an autonomous republic in northwestern Uzbekistan. The integrated gas-to-chemical project consists of (i) upstream development and operations at the Surgil Field involving drilling new production wells and constructing upstream infrastructure including expanding the complex gas treatment unit to supply up to 3 billion cubic meters per annum (BCMA) of gas and 115 thousand tons per annum (KTPA) of condensate; (ii) downstream development and operations at the gas treatment site, located approximately 115 km southwest of the Surgil Field, involving constructing a new gas separation plant, an ethylene cracker, a high-density polyethylene plant, a polypropylene plant, and associated utilities and supporting facilities; and (iii) associated gas pipelines, product transportation, and water supply infrastructure; the project also includes three 35-megawatt gas turbine generator sets for power supply independent of the national grid.

The project sources gas from its own Surgil Field and purchase gas, through a gas supply agreement with UNG, from the East Berdakh and North Berdakh fields. Each of the fields is currently in production and the incremental production of the three gas fields available to the project provides the required gas volume. Condensate supply (another raw material required for the polymer process) is provided under long-term supply contracts.

The upstream and downstream components of the project is connected by two parallel 115-km pipelines constructed to supply gas and condensate from the Surgil Field to the gas separation plant. The process technology is supplied by each of the downstream engineering, procurement, and construction (EPC) contracts and is fully aligned with technology license arrangements, providing the project with process performance guarantees and ongoing technical support from the process licensors.

Objectives and Scope The ADB assistance has financed, on a limited recourse basis, the engineering, procurement, and construction of gas wells, connecting pipeline, gas separation plant, ethylene cracker, polymer process plant, and associated utilities and offsite installations.
Status of Development Objectives The Project seeks to add incremental economic value to Uzbekistan's natural gas resources, enabling higher value products to be manufactured and exported. Demonstration effect of successful implementation of a pioneering investment framework will catalyze foreign direct investment in Uzbekistan's private sector large-scale manufacturing industry. ADB's presence as a direct lender provider will incubate scarce long-term cross-border commercial lending into Uzbekistan. Natural gas is a core economic resource for Uzbekistan and the project is a PPP of government and foreign investors.
Status of Operation/Construction COD was achieved on 25 November 2016.
Material Changes None
Linkage to Country/Regional Strategy The Uzbekistan Country Strategy and Program (CSP) 2001-2010 seeks to promote development in sectors where Uzbekistan has a comparative advantage, namely natural gas and manufacturing. Demonstration of the Investment Agreement structure supports the strategy objective of improving the business environment through improved financial norms and enabling investments for sustained GDP growth. The Project is aligned with the Strategy's focus on developing sectors where Uzbekistan has a comparative advantage in natural gas and manufacturing and leveraging that advantage for increasing the value-addition of exports and upgrading the practices and skills of its large scale manufacturing industry.
Safeguard Categories
Environment A
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The integrated gas-to-chemical project consists of (i) upstream development and operations at the Surgil Field to supply up to 3 billion cubic meters per annum (BCMA) of gas and 115 thousand tons per annum (KTPA) of condensate; (ii) downstream development and operations at 115 km southwest of the Surgil Field; (iii) associated gas pipelines, product transportation, and water supply infrastructure; and (iv) three 35-megawatt (MW) gas turbine generator sets. Since the Project involves existing as well as new facilities, an environment and social compliance audit of the existing facilities and activities was conducted by the Borrower through an Independent Consultant in accordance with ADB SPS 2009 requirements. The audit determined that impacts associated with existing and future operations can be mitigated to an acceptable level. Project was Category A for Environment, thus UzKor prepared an Environment and Social Impact Assessment. Mitigation and management of the impacts associated with the construction and operation of the project were set out in the Environmental and Social Management Plan (ESMP) which addresses the requirements of the relevant Uzbekistan environmental laws and licenses, the IFC Environmental and Social Performance Standards and the ADB Environmental and Social Safeguard Policy Requirements. Monitoring of the ESMP's implementation was conducted through the regular audits of the Lender's Technical Advisor (LTA). Uz-Kor has established its Integrated Management System (IMS) certified to the various international standards and has demonstrated commitment to continually improve staff capacity on health, safety and environment (HSE) and social issues through continual improvement of its IMS
Involuntary Resettlement

Although the project was categorized as B on involuntary resettlement (IR) impacts, allocation of land for the project did not lead to any IR impacts. The land allocated for gas field has been previously allocated for gas drilling and land allocated for pipelines are established area of pipelines traversing the region, all of which are government land. Pipelines did not cross any settlement and the UGCC was constructed on uninhabited and undeveloped land. There are no outstanding issues or grievances in relation to the land where the project is located.

All facilities affected during construction has been reinstated/rehabilitated after pipeline has been laid so that the area can again be recultivated and restore the area's natural landscape. There are no outstanding issues or grievances in relation to the land where the project is located

Indigenous Peoples Karakalpakstan has a multiethnic population, and development and operation of project facilities did not lead to indigenous peoples impact. Uzbekistan is made up of several traditional populations as well as minorities which arrived in the country during the Russian and Soviet domination. While Karakalpaks have distinct language and a collective attachment to Karakalpakstan as a whole and to the homelands of their forefathers, they do not have a collective attachment to any specific area within Karakalpakstan and the project areas have long been uninhabited. The project did not impact on the Karakalpaks
Stakeholder Communication, Participation, and Consultation Consultations were undertaken before project construction to inform different stakeholders about the project, its impact and proposed mitigation of the identified impacts. Engagement with the local communities and other stakeholders is continuously undertaken during operation. Uz-Kor has developed its Public Consultation and Disclosure Plan (PCDP) which has been incorporated into the borrower's IMS with a dedicated staff to liaise with the local community. The community grievance mechanism continues to operate, and complaints or grievances are usually relayed through different channels
Timetable for assistance design, processing and implementation
Concept Clearance 24 Jan 2011
Credit Committee Meeting 14 Nov 2011
Approval 17 Jan 2012
Last PDS Update 18 Jul 2022

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
Surgil Natural Gas Chemicals Project: Extended Annual Review Report Extended Annual Review Reports Dec 2021
Surgil Natural Gas Chemicals Project: Report and Recommendation of the President Reports and Recommendations of the President Dec 2011

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (2021) Environmental and Social Monitoring Reports Jul 2022
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (2020) Environmental and Social Monitoring Reports Jun 2021
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (2019) Environmental and Social Monitoring Reports Nov 2020
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (2018) Environmental and Social Monitoring Reports Dec 2018
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (June-October 2017) Environmental and Social Monitoring Reports Dec 2017
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (January-May 2017) Environmental and Social Monitoring Reports May 2017
Surgil Natural Gas Chemicals: Preliminary Environmental and Social Monitoring Report (2017) Environmental and Social Monitoring Reports Apr 2017
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (August-October 2016) Environmental and Social Monitoring Reports Nov 2016
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (January-March 2016) Environmental and Social Monitoring Reports Apr 2016
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (October-December 2015) Environmental and Social Monitoring Reports Jan 2016
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (2015) Environmental and Social Monitoring Reports Jan 2016
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (Audit Report No. 4) Environmental and Social Monitoring Reports Oct 2014
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (Audit Report No. 2) Environmental and Social Monitoring Reports May 2014
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (Audit Report No. 3) Environmental and Social Monitoring Reports May 2014
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (Audit Report No. 1) Environmental and Social Monitoring Reports Jan 2014
Surgil Natural Gas Chemicals: Environmental and Social Monitoring Report (2013) Environmental and Social Monitoring Reports Apr 2013
Surgil Natural Gas Chemicals Project Social Compliance Audit Report Jan 2012
Surgil Natural Gas Chemicals - Volume II: ESIA Report - Final Draft Environmental Impact Assessments Jan 2012
Surgil Natural Gas Chemicals - Volume I: Non Technical Summary - Final Environmental Impact Assessments Nov 2011
Surgil Natural Gas Chemicals - Volume III: Appendices Environmental Impact Assessments Nov 2011
Surgil Natural Gas Chemicals - Volume IV: Environmental and Social Management Plan - Final Draft Environmental Impact Assessments Nov 2011
Surgil Natural Gas Chemicals Project Environment and Social Impact Assessments Nov 2011
Surgil Natural Gas Energy and Gas Chemicals - Volume I: Non Technical Summary - Disclosure Draft Environmental Impact Assessments Aug 2011
Surgil Natural Gas Energy and Gas Chemicals - Volume II: ESIA Report - Disclosure Draft Environmental Impact Assessments Aug 2011
Surgil Natural Gas Energy and Gas Chemicals - Draft EIA Volume III: Appendices Environmental Impact Assessments Aug 2011
Surgil Natural Gas Energy and Gas Chemicals - Volume IV: Environmental and Social Management Plan - Disclosure Draft Environmental Impact Assessments Aug 2011

Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.