Uzbek national oil and gas holding Uzbekneftegaz and Russian engineering and construction company Stroytransgaz plan to sign an agreement in July to set up a US$221 million joint venture for the production of liquefied natural gas (LNG), Uktam Umarov, director of Uzbekistan’s Mubarek Gas Processing Plant, said Tuesday.

The joint venture will produce LNG at the Mubarek Gas Processing Plant, Prime-Tass reported. The charter capital of the joint venture will amount to US$500,000, Umarov said. Stroytransgaz and Uzbekneftegaz will own the joint venture on a parity basis.

In late 2007, Stroytransgaz plans to start building a unit for the production of LNG at the Mubarek Gas Processing Plant.

Stroytransgaz will contribute US$110 million for the construction, Uzbekneftegaz will provide US$45.5 million, Uzbekistan’s Fund for Reconstruction and Development will provide US$35.5 million and an unspecified Chinese bank will lend US$30 million, Umarov said.

When the joint venture reaches its projected capacity, it will process 12 billion cubic meters of natural gas annually and produce 270,000 tonnes of LNG and 70,000 tonnes of gas condensate.

Production of LNG at the plant is expected to start in November 2009. The plant plans to export over 80% of its LNG output.

Stroytransgaz won a tender to build the LNG production unit at the Mubarek Gas Processing Plant in late 2004. Initially construction was expected to start in 2005, but it was postponed several times in part due to changes in the project’s financing plan