Uzbekistan: Lukoil gets loan for Khauzak-Shady

Lukoil Overseas has agreed with a bank consortium to take a limited recourse loan of as much as $500 million for continued development of the Kandym-Khauzak-Shady-Kungrad project in Uzbekistan.

The funds are to be used to finance development of the Kandym group of fields and for a production increase in the Khauzak-Shady area. Lukoil Overseas said this is the first large-scale loan to a private company operating in the Uzbek fuel and energy industry.

Lukoil Overseas signed the Kandym-Khauzak-Shady-Kungrad PSA in June 2004, and it took effect in November 2004. The Khauzak-Shady group of gas fields went on production in 2007. Start-up of Kuvachi-Alat field in the Kandym group is set for 2014.

Lukoil Overseas, Uzbekistan’s largest foreign investor, estimates that 11.6 tcf of gas is recoverable. Expected production rate is 388 bcf/year.

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