Tashkent, Uzbekistan (UzDaily.com) -- Uzbekistan owed about US$600 million to the Russian company Lukoil for gas supplies in 2018, Azat Shamsuarov, senior vice-president of Lukoil for exploration and production, said.

He noted that in 2018 the company faced with an increase in the debt of the Uzbek side regarding payments for gas supplied by the Russian company, which was associated with the selection of part of the supplied gas to the domestic market.

“I recall that the terms of the PSA envisage the supply of the entire volume of gas for export, which is carried out under a commission agreement with Uztransgaz,” added Shamsuarov.

 “In the course of negotiations on debt repayment, the Uzbek side indicated the impossibility of its prompt repayment, as well as its need to select gas for the domestic market in the future. In order to stabilize the situation, they agreed to restructure the debt under the guarantees of the Ministry of Finance of Uzbekistan for two years with payments in equal monthly payments. Payments have already begun,” the vice-president of a Russian company noted.

“We also made a commitment to sell gas for deliveries to the domestic market in the amount of up to 5 billion cubic meters per year with a 12.5% discount to the weighted export netback. Deliveries are prepaid. We believe that the agreements reached form a stable basis for the continuation of our projects and return on investment,” Azat Shamsuarov added.

He noted: “Thanks to the application of the project approach, we have achieved excellent operating results in Uzbekistan. The Kandym gas processing complex with a capacity of 8 billion cubic meters was launched five months ahead of schedule. This is a great achievement for a project of this scale and level of complexity. ”

“The complex was built in record time of 24 months. The early launch of the complex allowed by September 2018 to bring the average daily gas production in Uzbekistan to a design level equivalent to about 14.5 billion cubic meters per year in the share of LUKOIL. Additional gas production from the early launch of the complex exceeded 2 billion cubic meters. m, and the total gas production increased by 67% year-on-year,” Lukoil’s vice president for exploration and production underlinted.