From Iran to Uzbekistan; Tashkent’s Far Reach for Development in the Petrochemical Sector

According to an exclusive report by Energy Press, Iran and Uzbekistan have decided to jointly invest in petrochemical production in Bukhara province, Uzbekistan. The National News Agency of Uzbekistan reported on the joint investment of Iran and Uzbekistan in the production of petrochemical products in the “Gizwan Free Economic Zone” of Bukhara province. In this regard, the two sides have established the “Sepehr Bukhara Petrochemical Company” and the project is scheduled to be implemented with a total investment of $274 million in the period between 2023 and 2026.
Start-up prospects
According to Uzbek media reports, the first phase of this joint project will begin by the end of this year. The official Uzbek news agency added in the report that the project will produce pentane, hexane, benzene, toluene, dimethyl carbonate, ammonium bicarbonate, caustic soda, potassium sulfate and other products.
These developments come as officials from the Chamber of Commerce and Industry of Uzbekistan (CCI) and the Bukhara regional administration visited the Sepehr Petrochemical Joint Investment Project in July. The venture, established in collaboration with Iranian partners, is the pioneer of a major petrochemical project in the Bukhara region. During the visit, Omid Pazylkhanov, head of the Uzbek Chamber of Commerce and Industry, and Shakhrakhali Sadilayev, head of the regional administration, inspected the $274 million project, which focuses on the production of various petroleum products.
Intel News also reported that the economic impact of the project is expected to be significant, with forecasts indicating an annual production value of $240 million in chemical and petrochemical products. Of this amount, $82 million is intended for exports, while $123 million will replace imported goods, supporting Uzbekistan’s goals for self-sufficiency in key industrial sectors.
In recent weeks, the head of the Central Asia, Caucasus and Russia Office of the Trade Development Organization of Iran, outlined a long-term vision for a $5 billion trade between Iran and Uzbekistan, and announced preliminary agreements to sign a preferential tariff agreement between the two countries. According to the head of the Central Asia, Caucasus and Russia Office of the Trade Development Organization of Iran, it is hoped that the volume of trade and economic exchanges between the two countries will reach over $1 billion in the medium term, but a long-term perspective of $5 billion in trade can be envisioned for the two countries.
Tashkent’s plan for economic development
Joint investment between Iran and Uzbekistan in the petrochemical sector is only part of Tashkent’s long-term goals for economic development in the energy and related industries, and reports indicate that the country has ambitious plans in this area. For example, in November, the media reported that Uzbekistan and the French company Total Energy discussed further strengthening cooperation in the petrochemical industry. This issue was discussed during a meeting between Laziz Kudratov, Minister of Investment, Industry and Trade of Uzbekistan, and Marie Brauzek, Executive Vice President of Total Energy. According to Trend, at the meeting, the parties exchanged views on existing projects in Uzbekistan and the timely implementation of previous agreements at the highest level. The two sides also agreed to deepen bilateral cooperation and accelerate the implementation of the discussed projects and initiatives.