"Stroitransgaz officials are expected to arrive next week to sign the founding documents on the creation of a joint venture to produce liquefied gas at the Mubarek Gas Treatment Plant," the source said, adding that all the necessary documents have been prepared and endorsed, including a contract on the realization of the project.

The source said a feasibility study on the project was completed in mid-May and is currently being endorsed by Uzbek ministries and agencies.

The construction of the liquefied gas facility at the Mubarek Gas Treatment Plant is to begin in the second half of 2008.

Stroitransgaz in 2004 won a tender to build a liquefied gas plant at Mubarek Gas Processing Plant. Construction on the plant was initially slated to begin in 2005, however this timeframe was adjusted on several occasions, including because of changes to the financing of the project.

According to the feasibility study, the cost of the project will total $221.5 million. Once the plant reaches projected production capacity, it will be able to refine 12 billion cubic meters (bcm) of natural gas and produce 270,000 tonnes of liquefied gas and 70,000 tonnes of gas condensate per year. Of that amount, 11.79 bcm of dry natural gas will be shipped to export gas transportation systems. Russia’s Gazprom will also buy some of the gas.

Stroitransgaz will finance $110.53 million of the project, while Uzbekneftegaz will finance $45.39 million. The Uzbek reconstruction and development fund will issue $35.39 million in loans for the project and another foreign bank will also provide a loan.

Uzbekneftegaz is the monopoly operator of Uzbekistan’s oil and gas sector. It was formed in 1998 and includes six stock companies.

Uzbekistan is the second largest gas producer in the CIS and one of the top ten worldwide. Uzbekistan produced a total of 65.3 bcm of natural gas in 2007 and plans to increase this figure to 66.8 bcm in 2008.