CDB contributes $1.2 billion to $1.4 billion syndicated loan for Uzbek Section of Line C of the Central Asia-China Gas Pipeline Project (Linked to Project ID #54489, #39997, #39955, #70616, #91898, #91901, #91917, #91923, #91926)

On April 30, 2007, the Chinese Government and the Government of Uzbekistan reached in principle agreement on the construction and operation of the Uzbek Sections of Lines A and B of the Central Asia-China Gas Pipeline. Then, in July 2007, China National Petroleum Corporation (CNPC) and Uzbekneftegaz signed an agreement on construction and operation of the Uzbek Sections of Lines A and B of the Central Asia-China Gas Pipeline. On November 18, 2008, Asia Trans Gas LLC (or Asia-Trans Gas LLC or СП ООО “Asia TransGas”) — a special purpose vehicle and joint venture of Trans-Asia Gas Pipeline Company Limited (TAPLINE) [50% equity stake] and Uzbekneftegaz National Holding Company (UNG) [50% equity stake] that was created on January 28, 2008 — signed a $3.5 billion syndicated loan agreement with China Development Bank (CDB) and Bank of China (BoC) for the Uzbek Sections of Lines A and B of the Central Asia-China Gas Pipeline Project. CDB's $1.75 billion contribution is captured in Project ID #91901 and BOC's $1.75 billion contribution is captured in Project ID #91917. The borrowing terms of the loan are unknown. However, it is known that the borrower pledged the pipeline itself as a source of collateral to the lenders. The proceeds of the loan were used by the borrower to finance EPC contracts with China Petroleum Pipeline Bureau, China Petroleum Engineering and Construction Corporation (CPECC), and Zeromax GmbH. The purpose of the project was to construct the Uzbek sections of Line A and Line B of the 1873 km Central Asia-China Gas Pipeline. These sections both measure 529 km in length and they run parallel to each other from Gedaim on the Turkmen-Uzbek border through central Uzbekistan. The project also involved the construction of three compressor stations. China Petroleum Pipeline Bureau, China Petroleum Engineering and Construction Corporation (CPECC), and Zeromax GmbH were the EPC contractors responsible for project implementation. A formal groundbreaking ceremony took place on June 30, 2008. Then, on October 1, 2008, the first compressor station of the Central Asia-China Gas Pipeline was built in Uzbekistan's Qasqadaryo province. The Uzbek section of Line A was put into operation in December 2009. Also, on December 14, 2009, the Presidents of China, Turkmenistan, Kazakhstan and Uzbekistan attended the inauguration ceremony of the China-Central Asia Gas Pipeline at the gas plant on the right bank of the Amu Darya River in Turkmenistan, and turned on the gas flow together. The first batch of gas arrived in China in January 2010. Then, on June 9, 2010, CNPC signed a framework agreement on the purchase and sale of natural gas with Uzbekneftegaz, which specified that Uzbekistan would supply 10 billion cubic meters of natural gas to China annually. Two months later, in August 2010, the Uzbek section of Line B was officially commissioned. The Uzbek section of Line B became operational in October 2010. A delivery capacity of 30 billion cubic meters per annum was reached by the end of 2011. It was originally envisaged that the Uzbek section of Line A would be built by December 31, 2009 and put into operation by January 2010, while the Uzbek section of Line B would reach completion by December 31, 2011. Then, on September 21, 2011, CNPC and Uzbekneftegaz signed an agreement on the construction and operation of the Uzbek Section of Line C of the Central Asia-China Gas Pipeline. In 2013, Asia Trans Gas LLC signed a $1.4 billion syndicated loan agreement with China Development Bank and Bank of China for the Uzbek Section of Line C of the Central Asia-China Gas Pipeline Project. CDB’s contribution to the syndicated loan amounted to $1.2 billion (captured via Project ID#54528). Given that there are only two known members of the loan syndicate, AidData assumes that Bank of China contributed the remaining $200 million. Bank of China’s contribution is captured via Project ID#91898. The purpose of the project was to construct the Uzbek section of Line C of the 1873 km Central Asia-China Gas Pipeline. The Uzbek section measures 529 km in length and its runs parallel to Lines A and B from Gedaim on the Turkmenistan-Uzbekistan border through central Uzbekistan. Line C ultimately ends in Horgos, in the Xinjiang region of China. With a designed capacity of 25 billion cubic meters per annum, Line C’s pipe diameter is 1,219 mm, 152 mm larger than Line A and Line B. The total estimated cost of the Uzbek Section of Line C of the Central Asia-China Gas Pipeline Project was $2.2 billion. China Petroleum Pipeline Bureau was the EPC contractor responsible for project implementation. It was notified that the project’s official commencement date was August 1, 2012. Then, on August 10, 2012, the first batch of steel pipes arrived in Uzbekistan. Construction of Line C began on January 16, 2013. The overall welding work for Line C was completed at the end of 2013. Line C went into operation on May 31, 2014 and it was officially commissioned on July 9, 2015. Upon completion of all its supporting facilities by the end of 2015, Line C was expected reach its designed annual deliverability of 25 billion m3. By the end of 2015, the overall delivery capacity of the Central Asia-China Gas Pipeline was expected to hit 55 billion cubic m3 per annum (which is equivalent to approximately 20% of China’s natural gas consumption).

Additional details

1. The Chinese project title is 中国-中亚天然气管道C线 or C线项目 or 中亚天然气管道C线工程项目 or 中亚天然气管道C线项目―乌国段. The Russian project title is газопровода "Узбекистан-Китай”. 2. The borrowing terms and conditions of the syndicated loan are unknown. This issue warrants further investigation. 3. Given that limited recourse transactions generally grant lenders recourse to the cash flow generated by the asset/project (i.e. gas sales), AidData assumes that this loan is collateralized. The $3.5 billion syndicated CDB/BoC loan to Asia Trans Gas LLC for the Uzbek Sections of Lines A and B of the Central Asia-China Gas Pipeline Project (captured via Project ID#91901 and #91917) was collateralized against the pipeline itself. 4. The Central Asia-China Gas Pipeline—also known as the Turkmenistan-China Gas Pipeline or the Asia Gas Pipeline—is a 1,873-kilometer long gas pipeline connecting Turkmenistan to China via Uzbekistan and Kazakhstan, which delivers gas equal to approximately 20% of China’s annual natural gas consumption. It consists of 4 lines (A, B, C, and D). Lines A, B, and C run parallel to each other. These three pipelines begin at Gedaim on the Turkmen-Uzbek border, run through central Uzbekistan and southern Kazakhstan, and end at Khorgas in China's Xinjiang Uyghur Autonomous Region. Roughly 188 kilometers of Lines A-C are in Turkmenistan, roughly 529 (or 530) kilometers of Lines A-C are in Kazakhstan, and roughly 1115 (or 1300) kilometers of of Lines A-C run from Kazakhstan to China. Line D, which is still under construction, will be 966 kilometers in length and connect Galkynysh to western China via Kyrgyzstan and Tajikistan. It will originate at the Galkynysh gas field in Turkmenistan. Then, in Tajikistan, Line D will run through Tursunzoda, Shahrinav, Hisor, Roudaki, Vahdat, Fayzobod, Nourobod, Rasht and Lakhsh (formerly Jirgatol) to Kyrgyzstan’s border. It will then go through Kyrgyzstan, crossing into China near the village of Irkeshtam on the Kyrgyzstan-China border. The Central Asia-China Gas Pipeline is supplied from the Galkynysh and Dauletabad gas fields, as well as from the Bagtyyarlyk gas field in Turkmenistan, where it originates. The pipeline is also supplied with gas from the Beineu-Bozoy-Shymkent Gas Pipeline to which it is linked in Shymkent, Kazakhstan. The Beineu-Bozoy-Shymkent Gas Pipeline delivers gas originating in gas fields of Kazakhstan. Line A and Line B connect to the Second West-East Gas Pipeline, while Line C connects to the Third West-East Gas Pipeline. Line D, which is under construction, will connect to the Fifth West-East Gas Pipeline. Line A, B, and C provide 55 billion cubic meters (bcm) of gas to China per annum. Line D is planned to have capacity of 30 bcm/year. 5. The construction of the China-Central Asia Gas Pipeline was financed through a series of Chinese loans and equity investments: $7.5 billion syndicated CDB/BoC loan for Kazakh Section of Lines A and B (captured via Projects ID#54489, #91923); $4.7 billion syndicated CDB/BoC loan for the Kazakh Section of Line C (captured via Projects ID#39997, #91926); $3.5 billion syndicated CDB/BoC loan for the Uzbek Sections of Lines A and B (captured via Projects ID#91901, #91917); $1.4 billion syndicated CDB/BoC loan for the Uzbek Section of Line C (captured via Projects ID#54528 #91898); $300 million CNPC Finance loan for Tajik Section of Line D (captured via Project ID#39955); and $300 million equity investment from Trans-Asia Gas Pipeline Company Limited for Line D of the Central Asia-China Gas Pipeline Project (captured via Project ID#70616). 6. The national holding company Uzbekneftegaz is a state-owned holding company of Uzbekistan's oil and gas industry. 7. Some sources suggest that construction began in September 2012 rather than January 2013. This issue warrants further investigation.

Number of official sources

8

Number of total sources

13