The project is located approximately 1,300 kilometers (km) from Tashkent in the Ustyurt region of Karakalpakstan, an autonomous republic in northwestern Uzbekistan.
|Project Name||UZB: SURGIL NATURAL GAS CHEMICALS|
|Borrower/Company||UZ-KOR GAS CHEMICAL LLC
|Type or Modality of Assistance||
|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.
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.|
|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.|
|Summary of Environmental and Social Aspects|
|Environmental Aspects||The Project involves drilling additional production wells and constructing upstream infrastructure including expanding the complex gas treatment unit (CGTU) and constructing a 115km pipeline at the Ustyurt plateau to connect to the Ustyurt Gas Chemical Complex (UGCC) which is located within a 100 hectares greenfield development site as well as access roads and other support facilities. Since the Project involves existing facilities, an environment and social compliance audit of existing facilities and activities within Surgil Field is conducted by the Borrower in accordance with the SPS requirements. Where land has already been acquired for any of the project components, the compliance audit will identify past or present concerns related to impacts on the environment, involuntary resettlement and indigenous peoples and plan corrective measures to address outstanding compliance issues. Where new land acquisition is required, appropriate resettlement planning documents were prepared to mitigate impacts. The Project has created approximately 10,000 jobs during construction and 2,000 jobs are expected during operation.|
|Involuntary Resettlement||No impact. The Surgil gas field utilizes 1,188 ha of land in the bed of the Aral Sea; the pipelines, transmission lines, UGCC, and other support facilities were constructed on 1,423 ha of state-owned semi-arid, uninhabited, and undeveloped desert lands in the Ustyurt Plateau.|
|Indigenous Peoples||No impact. Karakalpakstan has a multiethnic population and the project facilities does not affect any indigenous peoples.|
|Stakeholder Communication, Participation, and Consultation||Consultations were conducted in July 2010, March and July 2011 in Akchalak, Muynak and Kungrad settlements which were attended by local residents and officials from the district governments. Information on the Project and its impacts were disclosed and issues and concerns raised were incorporated into the project design. The ESIA was disclosed on ADB website in August 2011. Uz-Kor has appointed a Community Liaison Officer to address enquiries or complaints related to the Project.|
|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||07 Oct 2020|
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|Title||Document Type||Document Date|
|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.
Evaluation Documents See also: Independent Evaluation
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