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Somewhat than exporting pure fuel as a uncooked materials, Uzbekistan is investing into deep processing capability to allow home manufacturing of fuels, plastics and different merchandise.
The primary artificial diesel was produced on the newly constructed Uzbekistan GTL (UzGTL) gas-to-liquids (GTL) plant on July 1, in an essential step in Uzbekistan’s quest to maneuver away from pure fuel exports to manufacturing of higher-value merchandise domestically.
Uzbekistan, like its neighbours Kazakhstan and Turkmenistan, is a significant producer of pure fuel. It’s planning to extend manufacturing, however moderately than exporting the fuel as a uncooked materials, investments into processing capability have been launched to assist meet the demand of the nation’s rising inhabitants and industrial sector for gas, plastics and different merchandise.
The GTL plant in Uzbekistan’s Kashkardarya area was formally opened on December 25, 2021. It’s situated south of the town of Qarshi, not removed from Uzbekistan’s border with Turkmenistan, and proper subsequent to the Shurtan Fuel Chemical Complicated. The plant is supplied with fashionable fuel and petrochemical applied sciences from firms together with South Africa’s Sasol, Denmark’s Haldor Topsoe and US Chevron. It was constructed by a consortium together with Korean firms Hyundai Engineering and Hyundai Engineering & Development, and Uzbekistan’s Enter Engineering.
After it was put into operation, within the first half of this 12 months the plant has been regularly build up shares of semi-finished merchandise. It launched manufacturing of hydrogen again in February, for use within the manufacture of artificial oil and gas. On June 19, UzGTL stated the plant produced its first artificial oil, which was saved for additional refinement and processing into the top merchandise of diesel gas, aviation gas, kerosene, naphtha and LPG.
Shokhrukh Kholmatov, head of the consolidated info and analytical division at Uzbekistan GTL, who took journalists on a tour of the plant on June 25, defined: “We are actually within the commissioning part the place we’ve got begun the manufacturing of artificial oil. We’re accumulating artificial oil within the tanks, and when it reaches the enough stage we’ll start the manufacturing of the completed merchandise – kerosene, diesel, naphtha and LPG.”
Then on July 1, manufacturing of the primary artificial diesel merchandise began, with the preliminary batch shipped from the plant three days later. On July 5, artificial diesel was offered for the primary time on the Uzbek Republican Commodity and Uncooked Supplies Alternate.
As beforehand reported, when the plant is totally operational, it’ll have the capability to provide 1.5mn tonnes per 12 months of completed liquid gas merchandise, together with 307,000 tpy of jet gas, 724,000 tpy of diesel gas, 437,000 tpy of naphtha and 53,000 tpy of liquefied fuel.
There are additionally anticipated to be environmental advantages; throughout a go to to the plant researchers demonstrated the cleaner burn from its artificial oil in comparison with conventional oil.
The power ministry has stated that GTL fuels will produce 40% much less atmospheric emissions in comparison with typical emissions from comparative fuels. Annual emissions would thus be lowered by 13,500 tonnes.
Export faucets switched off
Till not too long ago Uzbekistan, one of many high three fuel producers within the former Soviet Union, exported fuel to Russia, China and a few of its Central Asian neighbours. Nonetheless, earlier this 12 months Uzbekistan suspended exporting the gas this 12 months amid a surge in native consumption, and goals to finish fuel exports altogether by 2025.
Home fuel consumption is predicted to quantity to 47.2bn cubic metres this 12 months, in response to authorities estimates. Furthermore, given Uzbekistan’s fast-growing inhabitants, demand for automobile fuels, plastics and different merchandise is quickly growing. This prompted efforts to develop deep fuel processing throughout the nation as a substitute for exporting fuel as a uncooked materials then re-importing completed merchandise.
This has been most blatant during the last couple of many years within the struggles by Uzbek drivers to seek out petrol or diesel for his or her vehicles. Lately vehicles have been switched en masse to run off compressed pure fuel (CNG) as a substitute, with filling stations promoting ‘metan’ (compressed fuel), which is now utilized by virtually two-thirds of vehicles. Whereas motorists initially transformed their very own vehicles, native automakers now produce vehicles designed to run on the gas.
Now UzGTL will likely be changing pure fuel into liquid fuels and merchandise, with import substitution potential estimated at over $1bn yearly.
“Our major targets are to: broaden Uzbekistan’s capability for the deep processing of home pure fuel; considerably lower imports of hydrocarbons; fulfill native demand for high-quality and environmentally pleasant gas; and supply the market with strategic value-added merchandise constituted of our personal uncooked supplies,” stated Power Minister Alisher Sultanov on the launch of the plant in December.
On the Tashkent Power Discussion board in June, First Deputy Power Minister Azim Akhmedkhadjaev additionally talked of the necessity to develop deep processing manufacturing of excessive worth added merchandise from hydrocarbons.
Alisher Bakhadirov head of the downstream division at state oil and fuel firm Uzbekneftegaz, stated Uzbekistan noticed the potential of investing into petrochemicals initiatives equivalent to GTL or methanol-to-olefins (MTO). He informed journalists on June 24 that Uzbekistan doesn’t want the Central Asia-China pipeline, and whereas fuel was beforehand transported by way of different pipelines or as LNG, the precedence now’s to feed home petrochemicals manufacturing.
Uzbekistan plans to extend pure fuel manufacturing by greater than 20% by the top of the last decade, Bloomberg reported, citing Ahmedhojaev in March. Fuel manufacturing is to rise to 66.1 bcm in 2030 from 53.6 bcm final 12 months.
On the identical time, Uzbekistan plans to maneuver partially away from utilizing fuel to provide electrical energy, because it embarks on its inexperienced transition. Quite a few renewables initiatives – wind, photo voltaic and hydro – have been initiated since 2019, as Tashkent faces the problem of supplying power to its rising inhabitants whereas on the identical time decreasing greenhouse fuel (GHG) emissions in keeping with its Paris Settlement and COP26 commitments. Fuel, in the meantime, will nonetheless be despatched to produce fashionable CCGT vegetation that may make up the shortfall when climate circumstances imply it will possibly’t produce sufficient from renewables services. That also needs to ease the power shortages that typically plague the nation in winter regardless of its fuel sources.
Concentrating on the native market
In keeping with this technique UzGTL is initially concentrating on the native market with its manufacturing. “The primary want is to promote to the native market and after that if we’ve got capability to promote for export we’ll,” Kholmatov informed bne IntelliNews.
Odiljon Karimov, first deputy normal director of UzGTL, stated new merchandise are prone to be added in future, however the present focus is on ending all of the commissioning works and on beginning manufacturing of the preliminary vary of GTL merchandise.
Commenting on anticipated demand, Karimov famous at a briefing for journalists that the launch of home manufacturing, making merchandise cheaper and extra available, could trigger demand to extend, decreasing the provision of merchandise for export.
“After we carried out a feasibility examine we discovered we are able to cowl virtually 80% of the native demand [for diesel], nonetheless, when there’s product availability the demand additionally will increase, we see from earlier merchandise,” stated Karimov.
“As soon as we offer the fuels to the native market, when the folks see the enterprise alternative they’ll open new enterprise, extra companies means extra demand. That’s why in future we are able to see that even our full quantity won’t be able to cowl demand in future,” he added.
Feeding the home plastics trade
One other mega undertaking is now within the works at an earlier stage, the MTO undertaking being developed by Sanoat Energetika Guruhi (SEG). Development of the plant is about to price over $2.5bn, and is predicted to be accomplished by end-2024.
“The MTO undertaking is without doubt one of the largest now within the pipeline of funding initiatives in Uzbekistan devoted to the brand new pattern technique to develop the county, monetisation of fuel, creating the added worth chain, and allocating all the worth processes right here in Uzbekistan,” Nigora Ibadova, head of the Fuel Chemical Complicated MTO, informed journalists in Tashkent on June 24.
“As an alternative of promoting fuel as uncooked materials we are actually specializing in establishing the premises which might deal with the fuel and produce the fuels that are in massive demand within the nation.”
Ibadova references the nation’s speedy inhabitants development; already essentially the most populous nation in Central Asia its inhabitants is increasing annually by greater than 600,000. “This implies the consumption of many, many finish merchandise is growing. A kind of is merchandise containing totally different polyolefins,” she stated.
Fuel processing is being developed similtaneously the long run textiles trade. Similar to fuel, Uzbekistan is seeing a pattern of “lowering gross sales of cotton as a uncooked materials, as a substitute making centralised clusters to provide all the worth chain like ready-made garments. To extend the number of merchandise which might be produced with using cotton we’d like artificial fibre,” defined Ibadova. Uzbekistan already has the fifth-largest producer of artificial carpets on the planet, however this presently will depend on imports of synthetic fibres from Turkey.
The builders of the MTO plant have been working intently with native producers which are presently importing polymers to make sure they produce what the trade wants. Similar to the UzGTL plant, the MTO plant will concentrate on the home market. When it begins operation, 70% of its merchandise will likely be offered on the native market, and the remaining 30%, principally polypropylene, will likely be export manufacturing.
As for the GTL plant, nonetheless, this will likely change because the deep processing of Uzbekistan’s fuel to create industrial inputs is already anticipated to result in the creation of recent companies and new industrial sectors throughout the nation.
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