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(Bloomberg) — Uzbekistan is stepping up efforts to bring major European and US energy companies into its natural gas sector, after last month securing investment from BP Plc.
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The government is “working to attract other major European and American companies to develop gas fields through production-sharing agreements,” said Khurshed Mustafayev, deputy minister of economy and finance for oil and gas. “The gas will remain in Uzbekistan and will continue to be an important part of the country’s energy mix for many years.”
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The Central Asian nation holds about 2 trillion cubic meters of proven gas reserves, but production has shrunk in recent years as aging fields go into decline. At the same time, the Uzbek economy has been expanding at more than 6% a year, driving up energy demand.
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In May, Uzbekistan signed a production-sharing agreement with BP and Azeri state energy company Socar for six blocks in the western North Ustyurt region. The UK oil major acquired a 40% participating interest, with the rest held by Socar and state-owned Uzbekneftegaz.
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As electricity use rises, the country is also expanding in renewables, which already account for about 20% of the energy mix. That share is expected to rise to about 25% by the end of the decade, Mustafayev said in an interview in Tashkent.
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The development of the sector in Uzbekistan has been underpinned by Saudi company ACWA Power, which has spent billions of dollars to develop clean-energy projects. That burgeoning output, as well as growing power demand at home and across its borders, has spurred ambitious plans to modernize the grid.
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ACWA is now involved in building electricity transmission infrastructure and large-scale battery storage systems in Uzbekistan, Mustafayev said. The country plans to invest about $2 billion in high-voltage networks and a similar amount in low-voltage infrastructure, he said, without giving a timeframe.
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