The company UzGasTrade JSC is being created for the unified purchase and sale of gas

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On June 16, President of Uzbekistan Shavkat Mirziyoyev signed a decree "On additional measures to reform the natural gas market".

The document creates a "UzGasTrade" joint-stock company, which will perform the functions of buying and selling natural gas in a centralized manner. Now the company “Uztransgaz” JSC is engaged in this, now it will be only a single operator of the main gas transmission system, specialized in the transportation, storage and transit of gas.

From August 1, "UzGasTrade" JSC will perform the following functions:

Purchases of natural gas from domestic producers as a single operator of the state at prices approved by the Interdepartmental Tariff Commission, and in a centralized manner through imports from external sources;

Sales of natural gas to the enterprise of "Hududgaztaminot" JSC and consumers connected to the main gas transmission system on the basis of direct contracts, including a single exporter, except in cases provided for by presidential decisions.

“Uztransgaz” JSC will be engaged in the execution of production sharing agreements and contracts between domestic producers, joint ventures and “UzGasTrade” JSC on the purchase of natural gas until August 1.

The resolution instructed to submit to the Cabinet of Ministers within a month an action plan for the payment of accounts payable and recovery of accounts receivable of “Uztransgaz” JSC, improvement of the financial condition, revision of the management and organizational structure, introduction of a system of modern financial reporting, management and procurement principles. The company is tasked with obtaining an international credit rating by the end of 2024.

In addition, proposals should be prepared for the redistribution of gas distribution stations and industrial collectors, taking into account consumers served through these facilities, with their inventory carried out in the country together with “Uztransgaz” JSC and “Hududgaztaminot” JSC.

A technical task should be developed to develop a Strategy for the development and modernization of the country's gas transportation system, including the infrastructure of underground gas storage facilities until 2040.

The Government, together with the Ministry of Energy, the State Committee for Industrial Safety and the State Tax Committee, was instructed to approve within two months the procedure for online monitoring of gas meters installed at all points of entry and exit of the main gas transmission system of “Uztransgaz” JSC, with their inventory.

The shareholder's right to state shares in “UzGasTrade” JSC is exercised by the Ministry of Economic Development and Poverty Reduction. The authorized capital of the company will be formed at the expense of part of the subsidies allocated from the state budget.

All rights and obligations under existing receivables and payables related to the purchase of natural gas and its sale on the domestic market, as of August 1, remain with “Uztransgaz” JSC.

Since August 1, the rights and obligations of “Uztransgaz” JSC under contracts and agreements on the purchase and sale of natural gas, including production sharing, are transferred to “UzGasTrade” JSC.

The Ministry of Economic Development and Poverty Reduction annually until October 1 (in 2022 — until August 1), based on the balance of resources and consumption of natural gas, will submit proposals for gas export volumes for the next year for approval to the Cabinet of Ministers.

“UzGasTrade” JSC will import natural gas on the basis of a tender, a tender and a government decree based on the results of direct negotiations.

The Interdepartmental Tariff Commission under the Cabinet of Ministers, when setting tariffs for the services of ”Uztransgaz” JSC for gas transportation, should provide for the repayment of its remaining accounts payable.

Within two months, it is planned to submit proposals to the government to improve the taxation of energy resources sold on the domestic market.

The Ministry of Finance, together with the Ministry of Economic Development and Poverty Reduction, in order to compensate for losses arising from the discrepancy in prices for the purchase and sale of natural gas, as well as financing the operational activities of “UzGasTrade” JSC, was instructed to:

within two weeks - submit proposals to the Cabinet of Ministers on the calculation and source of funds needed to finance “UzGasTrade” JSC;

within a month — to submit to the government a draft law on amendments to the state budget for 2022;

to provide subsidies for these purposes in the following years in the draft laws on the state budget.

Recall that “Uztransgaz” JSC completed 2021 with losses of 2.51 trillion soums ($236.2 million at the average annual exchange rate for 2021), 2020 — 3.57 trillion soums ($ 354.7 million). According to the source of "" in the government, today the total debt of the company exceeds $ 2 billion.

As we reported earlier, starting from July 1, it is proposed to raise electricity and gas prices in Uzbekistan, as well as introduce social norms for energy consumption.

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