The HOA follows the positive outcome of a joint pre-feasibility study undertaken by the three parties on the proposed project, based on Sasol’s proprietary technology, to produce high-quality transportation fuels from Uzbekistan’s gas reserves. The study was the result of an earlier agreement between Petronas and UNG for the proposed project that called for a detailed study for its development and implementation.

The partners are currently in negotiations with the Uzbekistan government for the detailed requirements of the proposed project and plan to proceed to the next phase of project implementation, including the establishment of a joint-venture company.

Petronas is already actively involved in a number of upstream ventures in Uzbekistan through the Urga Production Sharing Agreement (PSA) for the production and development of Urga, Kuanish and Ackhalak group of fields and several exploration blocks, namely the PSA for the Uzbekistan part of the Aral Sea, the Surkhansi Investment Block and the Baisun Investment Block.

Apart from these upstream projects, Petronas is also currently undertaking joint studies with UNG for cooperation in the development of downstream petrochemical projects in Uzbekistan.

According to the US Energy Information Administration, Uzbekistan (along with Turkmenistan) contain large amounts of natural gas reserves but are constrained by the lack of available natural gas transport infrastructure. Turkmenistan exports most of its natural gas production, while Uzbekistan continues to use its production for domestic purposes. Both countries expect to increase export volumes and diversify routes through recent agreements.