Korea, Uzbekistan settle Surgil gas field payment issue

Market: LPG, Natural gas, Petrochemicals
08/09/23

South Korea and Uzbekistan have reached an agreement on an unpaid $1bn with regard to their joint Surgil gas field project. The countries plan to develop the project and produce petrochemicals and gas.

A consortium of South Korean companies, comprising Lotte Chemical, GS E&R and state-owned Kogas, and state-owned Uzbekneftegaz (UNG) established joint venture Uz-Kor in 2007 to promote the business, with the consortium and UNG each holding a 50pc stake.

Uz-Kor produces and sells gas through UNG's subsidiary UTG, with UTG buying the gas at a fixed price in US dollars but selling it to the Uzbek domestic market in local currency. But UTG has yet to pay Uz-Kor for the gas produced because of concerns over a large deficit arising from paying a fixed gas price in US dollars.

The repayment issue was also because of the depreciation of the Uzbek currency, according to the economy and finance ministry (Moef), although further details were not disclosed. But the two countries have recently agreed on a repayment plant for the Surgil project receivables, six years after the receivables were incurred in 2017.

South Korea and Uzbekistan plan to jointly develop the Surgil gas field, and are looking to build and operate gas and petrochemical plants. This is scheduled to take place over 2008-2041, with commercial production having started in 2016.

The Surgil field produces, pre-processes and transports over 115,000 t/yr of gas condensate, and transports over 3bn m3 of natural gas, according to Uz-Kor.

The Ustyurt Gas Chemical Complex (UGCC) was completed in September 2015, and consists of a gas separation plant, an ethylene plant, a 387,000 t/yr polyethylene plant, an 83,000 t/yr polypropylene plant and a power plant, Uz-Kor's website shows. The complex can also produce 102,000 t/yr of distillation product and 8,000 t/yr of pyrolysis oil, which is sent to Uzbekistan's 61,000 b/d Bukhara refinery.

The UGCC has currently already produced over 180,000t of PE and over 40,000t of PP, and export of polymer products began in December 2015 to central and east Asia, CIS and Europe.

By Tng Yong Li

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

22/04/25

FERC commissioner Phillips resigns from agency

Washington, 22 April (Argus) — Democratic commissioner Willie Phillips has resigned from the US Federal Energy Regulatory Commission (FERC) after serving more than three years at an agency responsible for permitting natural gas infrastructure and regulating wholesale power markets. Phillips' departure will clear the way for President Donald Trump to nominate a replacement at FERC, who once confirmed by the US Senate would provide Republicans a 3-2 majority for the first time since 2021. Phillips, whose term was not set to expire until June 2026, had a reputation for negotiating bipartisan deals on contentious orders involving pipelines and power market issues in the two years he served as FERC's chairman under former president Joe Biden. Phillips has yet to release a statement explaining his abrupt resignation. But Trump has already fired Democratic commissioners and board members at other agencies that, like FERC, are structured as independent from the White House. Two of the fired Democrats, who were serving at the US Federal Trade Commission, have filed a lawsuit that argues their removal was unlawful under a 1935 decision by the US Supreme Court. The White House did not respond to a question on whether it had pressured Phillips to resign. FERC chairman Mark Christie, a Republican, offered praise for Phillips as a "dedicated and selfless public servant" who sought to "find common ground and get things done to serve the public interest". Christie for months has been downplaying the threats to FERC's independence caused by Trump's executive order that asserts sweeping control over FERC's agenda. Energy companies have come to depend on FERC in serving as independent arbiter in disputes over pipeline tariffs and electricity markets, without the consideration of political preferences of the White House. Former FERC chairman Neil Chatterjee, a Republican who served in Trump's first term, said in a social media post it was "disappointing" to see Phillips pushed out after he "played it straight" in his work at the agency. As chairman, Phillips was able to authorize a "massive LNG project" — the 28mn t/yr CP2 project — at a time when Biden had sought to pause LNG licensing, Chatterjee said. Separately, Paul Atkins was sworn in as the chairman of the US Securities and Exchange Commission (SEC) on 21 April, after the US Senate voted 52-44 earlier this month in favor of his confirmation. Atkins was previously the chief executive of financial consulting firm Patomak Global Partners and served as an SEC commissioner from 2002-08. Republicans will now have a 3-1 majority at the SEC. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more

News

Halliburton working to mitigate tariff impact: Update

22/04/25

News

22/04/25

Halliburton working to mitigate tariff impact: Update

Adds details from call. New York, 22 April (Argus) — Oilfield services giant Halliburton said it is working to mitigate the impact of tariffs, but still expects to take a 2-3¢/share hit on its second quarter profits. About 60pc of the tariff impact will fall on Halliburton's completions and productions unit, which includes its hydraulic fracturing business, while the rest will affect the drilling and evaluation operation. The company said it has a well-diversified supply chain and can pull other levels to mitigate the effect of tariffs. "We need a bit more clarity and stability in the structure of tariffs so that we can really understand what levers we can pull and then what the overall outcome is going to be," chief financial officer Eric Carre told analysts today after Halliburton posted first quarter results. Quizzed about the market turmoil resulting from US president Donald Trump's growing trade wars, the company said customers are still digesting how their operations will be affected. "From our perspective anyway, the market's not building new equipment," said chief executive officer Jeff Miller, helping to avoid the risk of an oversupply seen in past cycles. Moreover, US upstream companies are more "biased to working through things" than in the past, he added, echoing comments from Liberty Energy last week that the industry is better placed to withstand a downturn than in the recent past given a focus on capital restraint rather than growth at any cost. Halliburton recognized there is more uncertainty now than there was three months ago. However, its international business reported a "solid start" to 2025, with significant contract awards. Even as the market slows in North America, Halliburton aims to outperform rivals by driving technology gains and improving the quality of its services. "Many of our customers are in the midst of evaluating their activity scenarios and plans for 2025," said Miller. "Activity reductions could mean higher than normal white space for committed fleets, and in some cases, the retirement or export of fleets to international markets." International revenue this year is expected to be flat to slightly down compared with 2024, given increased risks to the outlook. Miller struck an upbeat tone in discussing the industry's long-term prospects, despite tariffs and the earlier return of Opec+ barrels, both of which have weighed on oil prices. Demand is at record levels and fossil fuels will play a key role in meeting future energy demand. "Decline curves are real, and in many basins significant, and adequate supplies today do not guarantee adequate supplies tomorrow without ongoing investment," Miller warned. "Our technology will continue to transform the industry and it will unlock new sources of value for us and our customers." 1Q profit, revenue down Profit of $204mn in the first quarter was down from $606mn in the same three months of 2024. Revenue slipped to $5.4bn from $5.8bn. North America revenue fell by 12pc to $2.2bn, largely because of lower stimulation activity in US land as well as a decline in completion tool sales in the Gulf of Mexico. International sales dipped by 2pc to $3.2bn, with Latin America revenue falling 19pc because of a slowdown in Mexico. However, revenue grew in Europe, Africa, the Middle East and Asia. The company also reported a pre-tax charge of $356mn from employee severance costs and an impairment of assets held for sale. Halliburton is the first of the top oilfield services firms to release results. Baker Hughes will follow later on Tuesday, and SLB at the end of the week. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Tariff ‘shock’ prompts IMF to cut growth outlook

22/04/25

News

22/04/25

Tariff ‘shock’ prompts IMF to cut growth outlook

Washington, 22 April (Argus) — Global economic growth is expected to be significantly lower in 2025-26 than previously anticipated because of the steep tariffs President Donald Trump is pursuing for most imports and the uncertainty his policies are generating, the IMF said. The IMF, in its latest World Economic Outlook released today, forecasts the global economy will grow by 2.8pc in 2025 and 3pc in 2026. That compares with the 3.3pc/yr growth for 2025-26 that the IMF was expecting just three months ago. Today's forecast is based on the tariffs that Trump had in place as of 4 April, before he paused steep tariffs on most countries and escalated tarrifs on China. These barriers had pushed up the effective US tariff rate to levels "not seen in a century", the IMF said. While Trump has altered his tariff levels repeatedly, he has imposed an across-the-board 10pc tariff on most imports, a 25pc tariff on steel and aluminum, a 25pc tariff on some imports from Canada and Mexico, and a 145pc tariff on most imports from China. "This on its own is a major negative shock to growth," the IMF said. "The unpredictability with which these measures have been unfolding also has a negative impact on economic activity and the outlook." IMF forecasts are used by many economists to model oil demand projections. The US and its closest trading partners appear to be among those hardest hit by tariffs and corresponding trade countermeasures. The IMF's baseline scenario forecasts US growth at 1.8pc this year, a decrease of 0.9 percentage points from the forecast the IMF released in January, reflecting higher policy uncertainty, trade tensions and softer demand outlook. Mexico's economy is now projected to shrink by 0.3pc in 2025, rather than grow by 1.4pc, while Canada's growth is forecast at 1.4pc in 2025, down from 2pc. The release of the IMF report comes as Trump has given no indications of a shift in thinking on tariffs, which he says are generating billions of dollars for the US and will prompt companies to relocate their manufacturing capacity to the US. "THE BUSINESSMEN WHO CRITICIZE TARIFFS ARE BAD AT BUSINESS, BUT REALLY BAD AT POLITICS. THEY DON'T UNDERSTAND OR REALIZE THAT I AM THE GREATEST FRIEND THAT AMERICAN CAPITALISM HAS EVER HAD!" Trump wrote on social media on 20 April. The next day, major stock markets indexes declined by more than 2pc, continuing their crash from when Trump began announcing his tariff policies. Trump on 21 April escalated his attacks against US Federal Reserve chair Jerome Powell for failing to lower interest rates as Trump has demanded. There could be a "SLOWING of the economy unless Mr. Too Late" — his nickname for Powell — "a major loser, lowers interest rates, NOW," Trump wrote. The IMF also ratcheted down its expectations for the Chinese economy. China's economy is expected to grow by 4pc/yr in 2025-26, down from the 4.6 and 4.5pc, respectively, the IMF was anticipating in January. The euro area is forecast to grow by 0.8pc in 2025 and 1.2pc in 2026, a decrease of 0.2 percentage points from the IMF's previous forecast. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

US offers Trinidad cushion from Vz gas sanctions

21/04/25

News

21/04/25

US offers Trinidad cushion from Vz gas sanctions

Kingston, 21 April (Argus) — Trinidad and Tobago and the US have agreed to seek ways to prevent Washington's sanctions on Venezuela's energy sector from harming the Caribbean country's natural gas production and energy security, both governments said. The administration of President Donald Trump revoked licenses earlier this month that had been granted by former president Joe Biden's government to gas-short Trinidad to develop the Dragon and Cocuina gas fields that straddle the maritime border with Venezuela. "Both sides agreed that we are going to work very closely to find a solution that achieves US objectives regarding Venezuela without harming Trinidad," the US State Department and Trinidad prime minister Stuart Young said. But neither government indicated how Trinidad would find alternative sources of feedstock in the short term to lift output of midstream and downstream products. Young and US secretary of state Marco Rubio discussed Trinidad's concerns in an 18 April telephone conversation, Young's office said. "Any outcomes of sanctions upon the Maduro regime and Venezuela is in no way indicative of our relationship with Trinidad and Tobago and the value we place on it," the state department said. Trinidad regards the cross-border gas fields as future sources of feedstock to counter a fall in domestic output that has suppressed LNG, petrochemicals and fertilizer production. It has struggled to recover gas flow since November 2017, following a long slide from a 4.3 Bcf/d peak in 2010. Trinidad's 2024 natural gas production of 2.53 Bcf/d was 2pc less than in the previous year, according to the latest data from the energy ministry. The US Department of the Treasury's Office of Foreign Assets Control (Ofac) had cleared the way for Trinidad and Venezuela to develop the 4.3 trillion cf Dragon field. Ofac also granted BP and Trinidad's state-owned gas company NGC a license to develop the cross-border Cocuina-Manakin field, which contains at least 1 trillion cf. The Trump administration revoked licenses both this year. By Canute James Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

US PVC demand outlook softens on weak housing

21/04/25

News

21/04/25

US PVC demand outlook softens on weak housing

Houston, 21 April (Argus) — US polyvinyl chloride (PVC) participants are downgrading initial demand estimates from nominal growth to more stable expectations in the coming months because of downbeat housing variables. Many US PVC participants throughout March and April said early signs from housing data and customer sentiment did not point to a robust housing construction season in the coming months. PVC buyers have been hesitant to build inventory under such conditions, further slowing consumption because many are unsure when or if end-user demand will support initial purchases. Privately-owned housing permits were at a seasonally-adjusted annual rate of 1.482mn units in March, according to data from the US Census Bureau and the Department for Housing and Urban Development (HUD). While March permits rose by nearly 2pc from February, they fell by less than 1pc from year-ago levels. Single family permits stood at 978,000 units, down by 2pc from the prior month and lower by less than 1pc from the same time last year. Housing starts in March were at a seasonally-adjusted annual rate of 1.324mn units, about 11pc below February rates but nearly 2pc higher than a year earlier. Single-family starts declined by about 14pc to a 940,000 unit rate from the prior month. The latest builder sentiment survey for April maintained a cautious view for the single-family homes market, reversing nominally weaker sentiment from March, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). Sentiment, though, remains well below the confidence seen at the start of the year, underpinning a weakening market. PVC participants are increasingly concerned that current and future tariffs imposed by President Donald Trump on critical trade partners will re-trigger inflation and thwart any future interest rate cuts by the Federal Reserve. Lower interest rates are largely regarded by PVC players as a bullish demand variable, especially in the housing sector. Federal Reserve chairman Jerome Powell did not ease market concerns last week, saying tariffs are likely to contribute to "higher inflation and slower growth" — or stagflation — and added markets were struggling "with a lot of uncertainty." Powell added that tariffs could challenge the Federal Reserve's dual mandate of maintaining price stability while fostering maximum job growth, leaving policymakers to wait for greater clarity on economic impacts before making any adjustments to interest rates. By Aaron May Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more