New free economic zone "Karakul" to be erected in Bukhara region for development of gas chemical industry

A new free economic zone "Karakul" will be built in the Bukhara region. The complex will produce up to 730 thousand tons of polymer products per year and will become the largest polymer producer in the country.

A new free economic zone (FEZ) "Karakul" will appear in the Bukhara region. The main facility on its territory will be the Gas Chemical Complex (GCC) under construction there based on MTO technology (a method for converting methanol into olefins), the Energy Ministry reports.

The industry cluster will be based on high-tech industries for the deep processing of hydrocarbon and mineral raw materials.

The start of the construction of an industry cluster, where high-tech related industries will be developed for the production of final products, was given by a resolution of the Cabinet of Ministers adopted on July 4, 2022.

The MTO MCC will become the anchor resident of the Karakul FEZ and the largest plant in the republic for the production of polymer products based on the MTO (Methanol to Olefin) technology, which allows the processing of natural gas methane.

The enterprise will produce polyethene terephthalate (PET) and polypropylene (PP), as well as ethylene vinyl acetate (EVA) and low-density polyethene (LDPE), which are new to the Uzbek market.

The complex will produce up to 730 thousand tons of polymer products per year and will become the largest polymer producer in the country and one of the few in the world producing such materials from methane.

“This is an important step in the development of the energy industry of our country, contributing to the creation of the first industry platform in the Republic of Uzbekistan and Central Asia for the implementation of large gas chemical projects. The cluster will contribute to the development of the region and the creation of more than 2,300 new jobs,” said M. Shakirov, Deputy General Director of SEG, MTO project manager.

For residents of the FEZ "Karakul" a number of tax, regulatory and other benefits are provided. In particular, tax preferences for property and water supply for 10 years, the right to the duty-free import of equipment and raw materials. Also, excise and income tax will be reduced by 50%, and other preferences will be applied.

“Several large enterprises-manufacturers of polymer products in Uzbekistan have already expressed interest in placing facilities on the territory of the FEZ. Among them are the largest carpet manufacturers SAG and UrGaz, pipe manufacturer Vero Group and textile products Mergantex,” the ministry said.