CNPC Capital provides $178 million loan for Karakul Gas Field Project (Linked to Record ID#53865).

Project narrative

On September 9, 2013, China National Petroleum Corporation (CNPC) and Uzbekneftegaz established a special purpose vehicle (SPV) and joint venture — called New Silk Road Oil & Gas Limited Liability Corporation (新丝绸之路石油天然气有限责任公司 or NSROG or Новый Шелковый путь or СП ООО ""Новый шелковый путь Нефт и газ"") — to jointly develop three natural gas fields (Dengizkul, Khojadavlat, and Sharky Alat) in the Karakul block. Then, on May 13, 2017, the Paris Branch of Bank of China provided a $177.7 million loan to New Silk Road Oil and Gas Company for Phase 1 of the Karakul Gas Field Project. CNPC issued a corporate guarantee in support of this loan. Then, in 2020, CNPC Capital Co., Ltd. (中国石油集团资本股份有限公司) provided a 9-year, $178 million loan to New Silk Road Oil & Gas Limited Liability Corporation (新丝绸之路石油天然气有限责任公司 or 新丝路公司 or NSROG or Новый Шелковый путь or СП ООО ""Новый шелковый путь Нефт и газ"") — a special purpose vehicle and joint venture of China National Petroleum Corporation (CNPC) [50% equity stake] and Uzbekneftegaz [50% equity stake] — for the Karakul Gas Field Project. The loan’s principal amount outstanding was $117 million as of December 31, 2020. The Karakul Gas Field Project was implemented in three phases. The total cost of the first phase was $377.5 million. The purpose of the project was to develop three gas condensate fields (Dengizkul, Kojadavlat, and Sharky Alat) in the Bukhara-Khiva region of Uzbekistan. Upon completion, the three fields were expected to produce 869.6 million cubic meters of natural gas for exportation and 6,400 tons of gas condensate for domestic markets annually. The project was implemented by three CNPC subsidiary companies: China Petroleum Engineering & Construction Corporation (CPECC) will develop the fields, designs, logistics, construction, and commissioning of facilities for the project; XIBU Drilling Engineering Company Ltd. will drill 10 production wells; and China National Logging Corporation will repair 6 wells and test production wells. The project was originally scheduled to begin in 2014, but construction did not begin until May 30, 2017. On December 4, 2017, gas production commenced in the Dengizkul field after the drilling of 2 new gas wells and the repair of 3 gas wells. This milestone marked the completion of the first phase of the project. As of May 17, 2018, the development of the Kojadavlat and Sharky Alat gas fields (the second and third phases of the project) was underway. All three gas fields became operational by August 2018. However, pipeline construction activities were still ongoing in late 2018 and early 2019. All three phases of the project were completed on May 5, 2019. All natural gas from the Dengizkul, Kojadavlat, and Sharky Alat fields (approximately 1 billion cubic meters of natural gas per year) is to be exported to China via the Turkmenistan-China Gas Pipeline (which was constructed with financing from China Development Bank and Bank of China, as captured via Record ID#54489 and Record ID#39997).