(Eurasia Review) – Lukoil Overseas has produced first gas from Dzharkuduk-Yangi Kyzylcha which is the largest field of the block, under the production sharing agreement (PSA) for development of gas reserves of South West Gissar (Kashkadarya Region, Republic of Uzbekistan).

Before the start of gas production on South West Gissar, oil was only produced in South Kyzylbayrak and Koshkuduk fields (according to the preliminary data 90,000 tons were produced in 2011). At the initial stage, the projected production in Dzharkuduk will be 1.1 billion m³ of natural gas per year.

The next step of field development will be the lunch of the gas processing facility and putting Adamtash and Gumbulak fields in production. Plans for this stage include drilling of more than 40 wells, building of external power supply lines, gas processing and gathering system, commercial gas pipeline, condensate pipeline, shift camp, field base and engineering infrastructure facilities. Associated investment will be $1.2 billion and the volume of gas production will reach 16 million m³/day (projected level is 5.8 billion m³/year).

The PSA for the project was signed for a term of 36 years and came into effect in April 2007. LUKOIL joined the project in March 2008. The contract area is operated by LUKOIL Uzbekistan which employs about 700 people of which 90% are Uzbek nationals. As for January 1^st 2011, proved reserves of the block are about 1417 billion cubic foots of gas and 23 million barrels of oil and condensate. 2D and 3D seismic survey was completed on the block in 2010 which resulted in reserves increase, identification of several prospects and discovery of two new fields, South East Kyzylbayrak and Shamoltegmas.

Lukoil’s gas projects in Central Asia are also being carried out in cooperation with Gazprom. It has been agreed that all gas produced by Lukoil in Uzbekistan will be sold to Gazprom at the Uzbek frontier.