Uzbekistan’s methanol-to-olefins complex under construction

Aug. 7, 2023
Sanoat Energetika Guruhi LLC has started formal construction of subsidiary Gas Chemical Complex MTO Central Asia LLC’s grassroots gas-to-chemicals complex based on methanol-to-olefins technology in Uzbekistan’s Bukhara region.

Privately owned Sanoat Energetika Guruhi LLC (Saneg) has started formal construction of subsidiary Gas Chemical Complex MTO Central Asia LLC’s (GCC MTO) grassroots gas-to-chemicals (GTC) complex based on methanol-to-olefins (MTO) technology in the Karakul area of southwestern Uzbekistan’s Bukhara region.

First approved in 2019 but subsequently stalled by the global pandemic and privatization of its ownership structure, the proposed GTC-MTO complex, once operable, will process domestic Uzbek natural gas to produce about 1.1 million tonnes/year (tpy) of high-quality polymers that include high-density polyethylene (HDPE), low-density polyethylene (LDPE), ethylene vinyl acetate (EVA), polyethylene terephthalate (PET), and polypropylene (PP).

At a revised estimated cost of just over $3 billion, the complex comes as part of Saneg’s broader plan to help Uzbekistan diversify its economy, develop domestic industries, reduce product imports, and enable the country to monetize its natural gas resources via production of export-oriented, high-value products.

In addition to presenting an overview of the GTC-MTO complex and its technologies, this article discusses the latest updates from Saneg, GCC MTO, Uzbekistan’s Ministry of Energy (MoE), and service providers regarding the project’s development.

Project location, benefits

Sited in Bukhara due to its proximity to competitive feedstock, energy supplies, suitable infrastructure, and key export markets across Europe and the Asia Pacific, the GTC-MTO complex serves as the anchor project in the Karakul Free Economic Zone (FEZ), a new industrial gas chemical cluster formally established by the Uzbek government in July 2022 to stimulate economic growth in the Karakul region by attracting domestic and foreign producers via an offer of various tax and financial incentives.

Among other benefits, operators in the cluster—Central Asia’s first special economic zone—will be allowed to conduct business in foreign currencies and be guaranteed access to uninterrupted utilities, including electricity partly produced from renewable sources.

Based on preliminary estimates, the new GTC-MTO complex, as well as related industries in the FEZ, will generate more than $2 billion/year in additional tax revenue over the next 20-25 years, according to the MoE.

Complex overview

Designed to process 1.3-1.6 billion cu m/year of Uzbek natural gas that consists mainly of methane with a minimum content of heavier components such as ethane, propane, and butane, the GTC-MTO complex will be divided into two sections that GCC MTO refers to as upstream and downstream operations (Fig. 1).

To be built on 15 hectares of land in the FZE, the complex’s upstream portion—known as Methanol Island—will include the following:

  • A synthesis gas (syngas)-methanol production block that hosts one plant dedicated to producing 1.34 million tpy of syngas from its initial feed of treated, dry natural gas and a second plant designed to convert that syngas into raw methanol as feedstock for the downstream olefins production unit.
  • An air separation unit (ASU) designed to separate atmospheric air into high-purity nitrogen and oxygen, the latter of which will be directed for syngas recovery.
  • A hydrogen unit.

The heart of the complex’s downstream section will consist of an MTO unit designed to convert methanol production from the upstream plant into light olefins (e.g., ethylene, propylene) to be used as feedstock for the site’s HDPE, LDPE, EVA, PET, and PP plants.

Selected process technologies, contractors

In late May 2023, GCC MTO signed a formal industrial gas processing contract with Air Products and Chemicals Inc. (Air Products) under which the service provider agreed to build, operate, and deliver unidentified technologies for the complex’s upstream Methanol Island installations.

In a series of 2021-23 releases, GCC MTO and the MoE confirmed technology contract awards for the complex’s production units as follows:

  • For the methanol production unit, Topsoe AS will provide its proprietary SynCor methanol process, which produces methanol via catalytic hydrogenation of syngas.
  • For the ASU, an unidentified licensor will supply a process based on cryogenic rectification that results in production of high-purity nitrogen and oxygen in gaseous or liquid form.
  • For the MTO unit, China Petroleum & Chemical Corp. (Sinopec) will provide its proprietary S-MTO process, which applies a specially designed S-MTO catalyst and continuous regeneration reaction in a fluidized bed reactor to convert methanol into light olefins.
  • For the LDPE-EVA swing plant, Versalis SPA—the chemical subsidiary of Italy’s Eni SPA—will deliver its proprietary LDPE-EVA gas-phase polymerization technology that enables flexible production of various LDPE and EVA grades in a single unit via high-pressure polymerization of ethylene (OGJ Online, Feb. 3, 2021).
  • For the MEG unit, Scientific Design Co. Inc. will supply its proprietary ethylene oxide-ethylene glycol (EO-EG) technology which uses a highly exothermic reaction in the presence of catalyst inside a multi-tubular reactor to oxidize ethylene into EO that is reacted with water to produce fiber-grade MEG.
  • For the PP unit, W.R. Grace & Co. will deliver a plant based on its proprietary UNIPOL PP technology that produces PP via polymerization of propylene gas in a fluidized-bed reactor using a powdered catalyst.
  • For the PET plant, Koch Industries Inc. subsidiary Invista Performance Technologies and partner Chemtex Global Corp. will provide a unit based on Invista’s proprietary continuous polymerization process, with Honeywell UOP LLC to deliver a unit based on its solid-state polycondensation process.

Preparatory stages of marketing analysis for the complex were completed by technical partners IHS Markit (screening study) and Nexant Inc. (detailed marketing research). In 2021-22, John Wood Group PLC’s Wood Italiana SRL delivered a series of feasibility studies for the project that, alongside the complex’s prefeasibility study, also included its front-end engineering and design. Based on an August 2022 contract award, GCC MTO said Wood also is providing detailed design of and procurement for the complex.

In late 2022, GCC MTO officially let a contract to Enter Engineering Pte. Ltd. to serve as main engineering, procurement, and construction (EPC) contractor for the complex.

Production, offtake

In a series of releases between May-June 2023, Uzbekistan’s Ministry of Energy (MoE), Saneg, and GCC MTO confirmed the new GTC-MTO complex will mainly produce the following finished-polymer products for use as feedstock by third-party manufacturers:

  • 280,000 tpy of HDPE for producing pipes, fittings, petroleum storage supplies, freezer containers, safety helmets, and furniture fittings.
  • 80,000 tpy of LDPE for manufacturing pipes, insulating materials, packaging, food films, and moldings.
  • 250,000 tpy of PP for producing artificial fibers, as well as electrical engineering and automotive components.
  • 100,000 tpy of EVA for manufacturing floor coverings, shoes, and sports equipment.
  • 300,000 tpy of PET for manufacturing containers, films, and synthetic fibers.

Preliminary offtake agreements for production from the complex are already in place with both regional and international companies, including traders and manufacturers. In mid-November 2021, the MoE said GCC MTO signed memorandums of understanding (MOU) for the complex’s products with:

  • Geneva-based global trader KTM SA’s Turkish subsidiary KTM Kimyevi Maddeler AS, one of largest distributors of petrochemicals, polyolefins, and industrial chemicals in the region.
  • SAG Gilamlari of Uzbekistan, one of the Commonwealth of Independent States’ (CIS) leading carpet manufacturers and one of the world’s five largest.
  • International Beverages Tashkent JV LLC, PepsiCo Inc.’s official bottler of international soft drinks in Uzbekistan.
  • Urgaz Carpet LLC, a leading textile manufacturer in the CIS and Central Asia.
  • ETC U-STAN FE LLC, one of Uzbekistan’s leading traders and exporters of chemical products.

As of late 2021, the MoE said more than 70% of the complex’s products will be sold on the domestic market to meet Uzbek demand, with the remaining 30% to be exported to other CIS countries, as well to China, Turkey, and countries in Southeast Asia.

Environmental, social accountability

From inception, project proponents focused development of the GTC-MTO complex on ensuring sustainable operation of the site across its estimated 25-year lifetime, as well as minimizing potential impacts to surrounding local communities.

Unlike existing conventional MTO production sites that use less environmentally friendly coal as a power source, GCC MTO’s upstream section is designed to maximize deep processing of domestically produced natural gas to provide a circular, sustainable supply of essential methanol, hydrogen, and other industrial gases (e.g., oxygen, nitrogen) for reuse in the GTC-MTO complex’s downstream production processes.

In addition to producing exportable volumes of high-grade polymers from Uzbek natural resources that comply with international specifications that will stimulate further growth of the domestic economy and attract outside investment in its industrial sector, GCC MTO’s project also will provide increased employment opportunities—2,500 permanent jobs and 10,000 jobs during the construction period—with extensive technical and safety training included. The operator also has provided for improvements to surrounding communities, including landscaping and creation of new parks near the project.

Project status

Following completion of the project’s environmental and social impact assessment by Mott MacDonald Group Ltd. and partner Ekostandart Ekspert LLC in December 2022, GCC MTO and EPC contractor Enter Engineering held a meeting in mid-December 2022 to mark the start of construction.

After beginning site preparation works for Methanol Island in April 2023, GCC MTO confirmed on July 3, 2023, that partner companies had completed fabrication of the project’s first batch of process equipment, including:

  • Five high and ultrahigh-pressure boiler water pumps.
  • Five cooling-water circulation system pumps.
  • A reciprocating compressor (for gas, air).
  • The MEG production unit reactor.
  • An unidentified number of propylene fractional columns (Fig. 2).

GCC MTO said it expects these first pieces of major equipment to be delivered to the construction site during second-half 2024.

With project construction and equipment fabrication now formally under way and remaining detailed design work due for completion in 2023-24, the GTC-MTO complex is scheduled to be fully operational by late 2025.


In June 2021, the Uzbekistan government and previous project proponents entered an MOU with Russia’s Gazprombank JSC, State Development Corp. VEB.RF, and the Russian Agency for Export Credit and Investment Insurance (EXIAR) for financial backing of the complex covering an initial $800-million, including insurance of risk related to its development (OGJ Online, June 4, 2021).

On June 13, 2023, GCC MTO said its owner Saneg—Uzbekistan’s largest oil and gas company—had signed a financial memorandum with Italy’s State Export Credit Agency (SACE) establishing a framework for future agreements between Uzbek and Italian counterparts involving additional financing of an undisclosed amount and insurance provisions for the GTC-MCO project’s ongoing development.

Related upstream developments

To improve efficiency and extend production of gas fields in Uzbekistan’s Kashkadarya region, Saneg and partner Geo Research and Development Co. (GRDC) recently introduced a series of centralized modular compressor units (MCU), the companies said May 3, 2023.

As part of first-stage implementation, GRDC said it expects the installation of MCUs at Chuvama, Pirnazar, Karaulbazar, and Shimoli Maimanak fields will enable pumping of about 2.75 million cu m/day of natural gas, with a planned second stage to introduce wellhead MCUs for compression and transportation of gas to centralized MCUs for final delivery to Methanol Island gas processing as feedstock for the GTC MTO complex.

Installation of the MCUs comes as part of Saneg’s increased use of advanced technologies to extend field life and extract remaining low-pressure gas volumes, the operator said.

Use of an MCU to improve efficiency was previously proven at Chuvama field, where the unit helped boost average gas production by 80% to 178,000 cu m/day from 104,000 cu m/day, Saneg said.

The operator said it plans to introduce 40 MCU wellhead compressors at additional fields in Kashkadarya region to ensure transportation of 7 million cu m/day of natural gas to processing plants.

In July 2023, Saneg confirmed use of MCUs at Chuvama, Kizilrabat and Shurtepa fields had doubled total gas production to 200,000 cu m/day from 104,000 cu m/day (Fig. 3).