Significant strengthening in recent years the potential of the republic in the field of gas production and reserves growth, as well as prospects for new discoveries in Ustyurt and the Aral Sea region, contributes to increasing the export opportunities of Uzbekistan. Thus, the main task of export policy is to ensure and promote national economic interests in volatile and difficult conditions in the global gas market.
To this end, the leadership of the Republic of Uzbekistan decided to develop alternative export routes for gas primarily to the growing market of the Asia-Pacific region. At present, almost all export of Uzbekistan natural gas flows in one direction – to Russia. This situation creates a certain pressure on the position of the republic in terms of dependence on one export way.
Thus, in 2007 Uzbekistan joined the large-scale project of construction the world's longest (more than 7000 km) transnational gas pipeline Turkmenistan – Uzbekistan – Kazakhstan – China. Between UZBEKNEFTEGAZ and CNPC had formed the «Asia Trans Gas» JV for the design, construction and operation of the Uzbek section of the pipeline (530 km).
As planned, in December 2009 was formally put into operation the first stage of the pipeline Central Asia – China. Presidents of all states participating in this project took part in the official ceremony of opening in Samandepe. This is the evidence of increased attention of the leadership of China, Turkmenistan, Kazakhstan and Uzbekistan to the ongoing project, as well as its importance for future economic development of these states.
In September 2010, is expected to complete the second stage of the linear part of the Uzbek section of the transnational gas pipeline. After this, the capacity of the pipeline will allow to transport annually to China 40 billion cubic meters of Central Asian gas. In accordance with the parties' agreement, Uzbekistan will supply this pipeline is about 10 billion cubic meters of gas, the remaining 30 billion cubic meters will be provided by Turkmenistan.
In this regard, the second line of pipe has been adjusted compared with the original scheme of the route. Now the pipeline will pass through the underground gas storage “Gazli”. For successful injection into the pipeline of Uzbek gas in the near future it is going to upgrade existing and construct new compressor plants. Thus, the overall commissioning of the Turkmenistan-Uzbekistan-China pipeline is scheduled for the end of 2011.
Uzbekistan's decision to establish an export gas flow into the Chinese market is strategically sound and wise step. Against the background of the effects of global economic crisis there is a substantial decline in production and consumption of natural gas, especially in Europe. At the end of 2009 the European Union countries have reduced gas consumption by 44 billion cubic meters which is undoubtedly a blow to the positions of gas companies, such as GAZPROM. As a result, the world's largest gas company was forced to reduce output and delay the commissioning of the largest gas fields such as Shtokman, Kovykta and Bovanenkovskoye. In addition, as a result of the gas revolution in the United States for mining shale gas, the world's largest fuel market was saturated with cheap gas which also became the catalyst for lower prices in Europe.
Noteworthy, but in China in recent years have seen the definite opposite trend. In this country demonstrating despite the crisis in the world high rates of economic growth there is a rapid increase in the consumption of natural gas as well as its share in the overall structure of the energy industry.
If in 2000 China consumed gas in the amount not more than 25 billion cubic meters, then in 2009 this figure exceeded 87 billion cubic meters. Gas consumption in this country increased by 3.5 times in the last 10 years.
Despite the fact that currently the gas is a relatively new energy source for fuel and energy sector in China, it has great prospects. Now its share in the energy balance is only 3-4%. However, in accordance with the Government's economic program of China, by 2010 its share will increase to 7%, and by 2020 – up to 10%.
Currently, the volume of gas consumption in China is practically equal to the volume of domestic production. However, according to various analysts' forecasts, by 2020 natural gas consumption in China may reach from 155 to 200 billion cubic meters per year. And as the most potential continental natural gas suppliers could be only Russia and Central Asian states.
Russia to deliver gas to the Chinese market needs to build pipelines from the Eastern and Western Siberia. But in near-term it seems unlikely. Therefore, GAZPROM can rely only on the supply of LNG which is not comparable with the supply of pipeline gas.
In this regard, it is obvious that the major providers of pipeline natural gas in the medium term will serve Turkmenistan and Uzbekistan, in consequence, perhaps Kazakhstan. Given the limited sources of supply, as well as the strategic importance of Central Asian gas from the standpoint of energy security of China, created the preconditions for such an environment in which Uzbekistan will have a strong position.

In general, Uzbekistan alternative flows of natural gas to China will not only strengthen its energy security, but also provide republic with a stable and long-term market for gas exports, and therefore significant amounts of foreign exchange earnings from the sale of strategic fuel. These funds can be a significant catalyst for its further economic development.
However, in the interests of Uzbekistan to receive from China not only money but also advanced technologies for energy conservation and development of alternative energy. China has made great strides in this direction. Attractiveness of Chinese technology primarily driven by their relative cheapness compared with Western analogs. However, by the degree of these technologies elaboration the Chinese analogs are not much inferior to European, as were created on their basis and are optimized for local conditions and requirements.
Summarizing, we can conclude that the construction of gas pipeline Central Asia – China is creating a new architecture of relations between the republics of Central Asia and China, prompting the cooperation between them to a new strategic level. This historic event, in turn, has geopolitical significance.

Ashraf Khodjaev, Ph.D.,
Expert of the Center for Political Studies