Michael Hart, a writer on international politics, in his article ‘Central Asia’s Oil and Gas Now Flows to the East’ (The Diplomat, August 2016), indicates that the world’s demographic and economic centre has shifted decisively eastward. The rapid development of Central Asia’s energy infrastructure has made it the region that finally looks to fulfil its potential in delivering the growing needs of Eurasia. For many years Central Asia’s energy infrastructure simply remained underdeveloped. Producers struggled to transform their raw natural resources into output. Quite apart from that it was difficult to find reliable methods of delivery. Supplies initially had to travel though aging pipelines to Russia and then on to western markets. There was also an absence of a complex pipeline system to the landlocked Caspian Sea across which oil could have travelled to the west. It is rapidly changing today, with an increased development of oil and gas fields to meet the energy-hungry markets of China and India. Hart also comments that the reduction in Russian influence created a void that is being filled by a surge in Chinese investment.
However it is not all down to China. In July, America’s oil giant, Chevron Corporation, together with ExxonMobil and other partners, announced plans to invest about US$37 billion to boost oil output by 260 000 bpd at the Tengiz oil field in Kazakhstan.Once completed, it is expected to generate 1 million bpd by 2022. If Kazakhstan is Central Asia’s leading oil producer and China’s major energy partner, Turkministan is the region’s main gas exporter. It exports its reserves to China through the Central Asia-China gas pipeline. Uzbekistan also supplies gas through the upgraded pipeline network and in 2013 concluded a deal that attracted a US$15 billion investment from China. In April of this year, Korea’s Hyundai Engineering Company announced a US$2 billion deal with Russia’s Lukoil and UNG, Uzbekistan’s state run oil and gas company, to build the country’s largest gas processing complex. China has also financed two refineries in Kyrgyzstan.
Michael Hart concludes, “As the world’s major hubs of population and finance have shifted to the east, the global energy landscape must follow suit. Therefore while China’s extensive investment in the region’s energy infrastructure will undoubtedly grant it greater influence, it has also been vital and necessary in allowing Central Asia to fulfil its long held resource potential, placing it in a firm position to advance global energy security over the coming decades.”
News from Central Asia on the cement industry is sometimes difficult to authenticate. However, when occasional news items do emerge, these provide a clue as to what is happening in the individual states and even in the region as a whole. For example, one reliable source reports that the cement market in Kazakhstan decreased by 10% during the first half of this year compared with the same period in 2015. Overall cement shipments from local companies remained stable as imports decreased by 63% (representing 5% of the local market) and exports doubled due to the favourable exchange rate against the currencies of the surrounding countries. Steppe Cement’s local market share increased to 18% in the first half of 2016 up 2% on the previous year. It exported 4% of its sales compared to none in 2015. The company estimates that the country’s consumption will be 9 million t this year.
In August of this year, the Shymkentcement plant became part of the HeidelbergCement Group through the global acquisition of Italcementi by the German company. Earlier in the year the plant’s new dry process line, which replaced the four wet process kilns, became operational resulting in a production capacity of 1.2 million tpy and increased efficiency. In 2014, the European Bank for Reconstruction and Development (EBRD) agreed a loan of approximately u20 million to help fund the revamping of the plant. HeidelbergCement also owns two other plants in the country: Bukhtarma Cement Company and CaspiCement. As reported a year ago, China’s Huaxin Cement announced plans to invest US$150 million in a new plant in Kazakhstan’s Aktobe region. It will be fired by natural gas.
Huaxin Cement also has a major presence in Tajikistan where its second production line went into operation in Sughd in northern Tajikistan in March of this year. The new 1.2 million tpy plant also operates a 25 MW thermal generator and an exhaust power generator. A smaller plant is reported to be opening in the southern city of Dangara. In 2015 the country is reported to have produced 1.2 million t of cement, while the annual requirements are estimated at 2 million t.
At the end of July 2016, Trend news agency reported that Turkey’s DAL Teknik Makina has successfully completed the expansion of the Almalyk Mining Metallurgical JSC plant in the country’s Jizzakh region in Uzbekistan. Production capacity is 760 000 tpy of Portland cement and 350 000 tpy white cement. In 2015 the group exported 5500 t of white cement and 10 000 t of OPC. At the same time, UzReport information agency confirmed that the ‘Titan Cement’ enterprise had completed a 200 000 tpy plant in the Republic of Karakalpakstan earlier this year. The country’s six plants current produce about 8 million tpy. It is reported that the three plants, Kyzylkumzement, Akhangaranzement and Bekabadzement are currently being modernised. This follows an investment programme initiated in 2014 by Uzstroymateriali involving nine projects for the modernisation and reconstruction of these plants.
It is understood that total cement production capacity in Turkmenistan is just under 5 million tpy. In 2015, as a result of plants commissioned in the Balkan and Lebap provinces (built by Turkey’s Polimeks company), the country produced 3 million t of cement. This was said to exceed all expectations. In August 2015 Zhejiang Shangfeng Building Materials announced plans to invest US$156.31 million on a new cement plant project in Kyrgyzstan. Completion was scheduled for this year. Cement consumption has been increasing year on year, and in 2015 it was about 1.5 million tpy.
This is part two of a three-part article written for World Cement’s December issue and abridged for the website. Subscribers can read the full December issue by signing in, and can also catch up on-the-go via our new app for Apple and Android. Non-subscribers can access a preview of the December 2016 issue here.
Read the article online at: https://www.worldcement.com/special-reports/28122016/the-stans-what-now-part-two/