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Kandym Gas Field Development

Environmental Impact Assessment

May 18, 2011

Prepared by:

LUKOIL Uzbekistan Operating Company

1, A. Khodjaev str., Tashkent

100027, Republic of Uzbekistan

Kandym Gas Field Development Environmental Impact Assessment 18 May 2011

Contents

1. Executive Summary ................................................................................................ 1 2. Legal framework ..................................................................................................... 4 2.1 Legislation ............................................................................................................... 4 2.2 Institutional framework .......................................................................................... 10 2.3 PSA Environment Protection Requirements ......................................................... 11 2.4 Requirements to EIA Procedure ........................................................................... 15 2.5 Environmental Standards ...................................................................................... 16 3. Project Description ................................................................................................ 19 4. Description of environmental conditions ............................................................... 36 4.1 Topography and Geology ..................................................................................... 37 4.2 Desertification ....................................................................................................... 38 4.3 Climate .............................................................................................................. 40 4.4 Air Quality ............................................................................................................. 40 4.5 Surface and Ground waters .................................................................................. 46 4.6 Soil and Subsoil .................................................................................................... 53 4.7 Radiation .............................................................................................................. 71 4.8 Flora and Fauna .................................................................................................... 74 4.9 Social situation analysis ........................................................................................ 77 5. Expected Environmental and Social Impacts and Mitigation Measures ................ 82 5.1 Expected Environmental Impacts and Mitigation Measures ................................. 82 5.1.1 Wells construction ................................................................................................. 82 5.1.1.1 Impacts on Air Quality ........................................................................................... 82 5.1.1.2 Impacts on Water Quality ...................................................................................... 84 5.1.1.3 Impacts on Wastes Generation ............................................................................. 85 5.1.2 Development of gas-condensate fields ................................................................. 87 5.1.3 Impacts on Water and Waste Water Quality ......................................................... 92 5.1.4 Construction-period infrastructure ......................................................................... 96 5.1.5 Impact on Desertification ...................................................................................... 98 5.1.6 Potential Impact on Birds ...................................................................................... 98 5.1.7 Potential Noise Impacts ........................................................................................ 99 5.2 Social Impacts and Mitigation Measures ............................................................ 100 5.2.1 Impacts of Land Acquisition ................................................................................ 100 5.2.2 Impacts on Employment and Local Development ............................................... 105 5.3 Cumulative and Induced Impacts ........................................................................ 108 5.4 Impact Summary of Mitigating Measures ............................................................ 109 6. Analysis of alternatives ....................................................................................... 116 6.1 Selection of preferred alternative ........................................................................ 116 6.2 No action alternative ........................................................................................... 117 6.3 Alternative to Kandym GPP ................................................................................ 118 6.4 Selection of Final Alternatives ............................................................................. 118 7. Disclosure, consultations and participation ......................................................... 119 7.1 Project Design and Preparation .......................................................................... 119 7.2 Construction and Operations Phase ................................................................... 122 8. Procedure for addressing grievances ................................................................. 124


9. Environmental Management Plan (EMP) ............................................................ 126 9.1 Health, Safety and Environment Program .......................................................... 127 9.1.1 HSE Policy, Objective & Commitment ................................................................ 128 9.1.2 Structure and responsibility ................................................................................. 129 9.1.3 Preventive Measures Program ........................................................................... 131 9.1.4 Occupational health and safety ........................................................................... 132 9.1.5 Emergency Response Plan ................................................................................ 132 9.1.6 Emergency Response Plan Committee .............................................................. 133 9.2 Environmental Monitoring Program .................................................................... 133 9.2.1 Internal Monitoring .............................................................................................. 133 9.2.2 Documentation and Reporting ............................................................................ 137 9.3 External Monitoring ............................................................................................. 137 9.3.1 ISO 14001 and OHSAS 18001 Management System Audit ............................... 137 9.3.2 State Regulations Required Environmental Inventory ........................................ 138 9.3.3 ADB SPS Monitoring Requirements by External Expert ..................................... 138 9.4 Institutional Arrangements, Implementation methods and efficiency indicators .. 140 9.4.1 Institutional Arrangements .................................................................................. 140 9.4.2 Implementation methods and efficiency indicators ............................................. 140 9.5 EMP budget ........................................................................................................ 141 10. Conclusions and Recommendations .................................................................. 145 10.1 EIA Process ........................................................................................................ 145 10.2 Results ............................................................................................................ 145


List of attachments

Attachment No.1. Conclusion of the State Environmental Expertise Committee for EIA of the GPP

complex construction and Kandym group of fields development.

Attachment No.2. Detailed map of Kandym Group оf Fields.

Attachment No.3.1 Observation network layout within the framework of Environmental Audit Section of the Kandym Group of Fields.

Attachment No.3.2 Environmental Audit Methodology.

Attachment No.4. Handbook of plants and animals in Khauzak-Shady and Kandym Group of Fields (Bukhara region).

Attachment No.5. Conclusion of the State Environmental Expertise Committee for “Report on Environmental Audit of the Contract Area consisting of: the Kandym Group of Fields, Khauzak-Shady Site and Kungrad Site”.

Attachment No.6. Plan of organizational and engineering actions in Health, Safety and Environment of “LUKOIL Uzbekistan Operating Company” LLC for 2010.

Attachment No.7. Action plan of Environmental Protection and Rational Exploitation of Natural Resources of “LUKOIL Uzbekistan Operating Company” LLC for 2010.

Attachment No.8. Health, Safety and Environment Program in respect jf Oil and Gas Operations within the Contract Area for projects of Kandym-Khauzak-Shady-Kungrad and Gissar-Ustyurt for 2010-2012.

Attachment No.9. Report on Implementation of Action Plan of Environment Protection and Rational Exploitation of Natural Resources for 12 months of 2009 in Bukhara region (Khauzak – Shady section and Kandym group of fields).

Attachment No.10. Report on Implementation of Action Plan of Environmental Protection and Rational Exploitation of Natural Resources for 12 months of 2010 in Bukhara region (Khauzak – Shady section and Kandym group of fields).

Attachment No.11. Monitoring stations layout at Kandym group of fields section, 2011.

Attachment No.12. Outline and Scope of the Semi-Annual Report on Environmental, Health and Safety and Social Monitoring by the Operator.

Attachment No.13. Public Consultations in Cities of Alat and Karakul, March 2011.


Abbreviations and Acronyms

ADB Asian Development Bank AP Affected Persons APP Atmospheric Pollution Potential APP atmospheric pollution potentialBCS Booster Compressor Station BOD Biological Oxygen Demand CAC Central Asia Center gas pipeline CBD Convention on Biological Diversity CCD Convention to Combat Desertification CM Cabinet of Ministers CO2 carbon dioxide COD Chemical Oxygen Demand COS Carbon Oxysulfide CP Collection Point DEIA Draft Environmental Impact Assessment, DS Drilling Sludge DWW Drilling Wastewater EEA Ecological Effect Assessment EIA Environmental Impact Assessment EIS Environmental Impact Statement EMP Environmental Management Plan EP Environmental Protection FCCC Framework Convention on Climate Change GPP Gas Processing Plant H2S hydrogen sulfide HSE Health, Safety and Environment KGF Kandym Gas Group of Fields KGPP Kandym Gas Processing Plant MC Managing Committee MH RU Ministry of Health of RUz MMU Mud Mixing Units MPC Maximum Permissible Concentration NE Nature Environment NHC National Holding Company NO2 Nitrogen Dioxide OE Objects of Environment OM Oliy Majlis (Parliament) PEM Production and Ecological Monitoring pH Hydrogen ion PM Particulate MatterPOL Petroleum, Oil and Lubricants PSA Production Sharing Agreement PTL Power Transmission Line RUz Republic of Uzbekistan SCNP State Committee for Nature Protection SDW Solid Domestic Wastes SEE State Ecological Expertise SEM State Environmental Monitoring SO2 Sulfur dioxide SPZ Sanitary Protection Zone SRLI Safe Reference Levels of Impact SSIAC State Specialized Inspection of Analytical Control TSS Total Suspended Solids


UZS Uzbek Soum WDM Waste Drilling Mud

WEIGHTS AND MEASURES

oC Degrees Celsius g/m3 microgram per cubic meter mg/Nm3 milligram per normal cubic meter mpdc maximum permissible daily concentration (24 hours); motc maximum one-time concentration (10 minutes – 1 hour); mpac maximum permissible annual concentration (1 year). mg/l milligram per liter

Kandym Gas Field Development Environmental Impact Assessment 29 March 2011 1

1. Executive Summary

1. The purpose of this Project is the development of the KGF and the associated gas processing plant. The capacity of the field and the gas processing plant is estimated up to 8 billion m3/year of natural gas, more than 200 thousand tonne/year of gas condensate and about 190 thousand tonne/year of sulfur.

2. The aim and necessity for development of the KGF are governed by the need for general economic development of the RUz’s economy in which the development of natural resources play a key role. The development of KGF will also provide socio-economic benefits and raise the living standards of the complex’s and contractor’s personnel, many of whom will be residents from the nearby communities.

3. The target activity will maximize the use of natural resources by increasing the recovery of hydrocarbons and associated products by attracting critical technical knowledge and foreign capital. The target activity separates methane from valuable components found in the natural gas: propane-butane fractions, gas condensate and sulfur. Methane and its valuable components are then utilized for productive economic use. KGF also helps in deepening international cooperation and trade as most of the product is exported to neighboring Central Asian and other countries.

4. The Production Sharing Agreement (PSA) for the KGF, Khauzak and Shady blocks, and Kungrad block between the Republic of Uzbekistan and consortium of investors consisting of the Oil Company OAO LUKOIL and The National Holding Company Uzbekneftegas was signed on June 16, 2004. On the same date, June 16, 2004, the Oil Company “LUKOIL” transferred its rights and duties under the PSA to the company “LUKOIL Overseas Uzbekistan Ltd.”. Transfer of rights and duties was approved by the Decree of Cabinet of Ministers of RUz № 428 dated September 14, 2004. On November 24, 2004 the PSA entered into force (became effective).

5. “LUKOIL Uzbekistan Operating Company” or LUOC (as Operator by the PSA ) is planning to develop production wells, cluster sites, gathering points, in-field pipelines, gas processing plant, and to build trunk gas pipeline and infrastructure facilities (railway branch, access road, water supply wells, power transmission lines, voltage reduction station, camp, etc). Drilling of production wells and the KGF is planned for 126 wells, including 28 at the satellite fields.

6. Initial drilling activities at KGF have already begun. Construction works of facilities at KGPP is scheduled to begin in 2014 (railway) and complete in 2019 (3 stage KGPP). Thus, the commissioning of field facilities of Kandym group of fields will continue over the next 20 years from the date of commencement of complex construction. According to the PSA the whole complex (facilities of Kandym group of fields) will be operated by Operator until 2039.

7. This report presents the findings of the environmental impact assessment (EIA) carried out by LUKOIL Uzbekistan Operating Company to develop the Kandym Gas Field project (KGF) located Karakul District of Bukhara Province of the RUz.

8. The EIA of the proposed activity has been conducted in compliance with the current laws and regulatory system of the RUz and based on the results of researches and studies of environmental, economic, social and administrative aspects, as well as on analysis of the existing condition and specific characteristics of the environment in the area of the proposed activity. The baseline social and economic conditions in Karakul District, as well as social and economic aspects, related to development and performance of works on gas processing at the KGF have been considered. Alternative options of projected activities and process solutions have been considered. Consultations were also held with local government officials and nearby residents to provide information and viewpoints regarding the Kandym Gas Field project (KGF).

9. The forecast of potential effect of the proposed works on the environment including atmosphere, soil, underground and surface waters, flora and fauna as well as hazards to operational personnel and population, and to the environment are described. The measures on


prevention from potential adverse impacts to the environment are outlined as well and summarized in the Environmental Management Plan.

10. The evaluation held in the context of this EIA of the anthropogenic effect of the works (wells construction and development of the complex of technical and nature protection measures), as well as Conclusion of the State Environmental Expertise Committee for EIA of the GPP complex construction and Kandym group of fields development (Attachment №1) confirmed that the impact to the environment will be of local character and low level without occurrence of irreversible processes. The planned nature protection measures will allow successful development of the wells in compliance with all requirements to the environmental protection.

11. Implementation of the KGF will: comply with organizational and technical measures to prevent pollution of the soils, surface

and ground waters and atmospheric air; include controls over state of the atmospheric air, soils, waters, biota, and etc.; provide for neutralization and timely utilization (recycling) of industrial and consumption

wastes; include recultivation/reclamation of land provisionally acquired for construction sites; comply with RUz and ADB’s environment and social requirements regarding as laid out in

ADB’s 2009 Safeguards Policy Statement, 2005 Public Communications Policy, 2001 Social Protection Strategy, the World Bank Group’s Performance Standards and Environmental, Health and Safety Guidelines (e.g. General Guidelines, Onshore Oil and Gas Development, Railways, Electric Power Transmission and Distribution) covering environment and social matters, including but not limited to environment, community and worker health and safety, labor and working conditions, land acquisition and involuntary resettlement, and consultation and participation.

12. In addition, all the processes of construction and operation of the KGF’s facilities arrangement will be covered by environmental monitoring program in the Contract Area. Implementation of monitoring will allow prompt identification and prevention of possible adverse consequences for the environment. The further development of nature protection measures at every project stage will allow successful operation of the KGF’s facilities with observance of all the requirements to environment protection.

13. The main findings of the EIA are:

the implementation of the project, will strive to avoid involuntary resettlement, include the employment of local people, and create convenient living and working conditions for operational personnel;

the risk of emergency situations resulting in considerable negative environmental or social consequences is not significant;

The proposed Kandym Gas processing plant will adopt and implement modern technologies (e.g. superklause process, etc.) and other emission and pollution control measures to prevent significant environmental impacts, risks and hazards. An adequate EMP (Table 47), including protection plan and monitoring program, has been prepared and committed to by the Operator for implementation, with specific budget and staff resources allocated. This includes air emission, water quality, soil and subsoil, background radiation, ecological resources (flora and fauna), and social aspects. No endangered species or protected areas are found in the Contract Area.

14. The implementation of the projected activities will not affect the environment with long-term harmful consequences, provided that operational instructions, safety procedures, environmental measures are performed and observed.

15. The development of gas fields similar to KGF has been done successfully by Lukoil (and Operator) and there is sufficient experience and technical know how within the oil and gas industry to successfully develop such projects.


16. Conclusion of the State Environmental Expertise Committee for EIA of the GPP complex construction and Kandym group of fields development (Attachment №1) has shown their compliance with regulatory documents. Proposed measures on decrease of negative impacts to the environment and rational use of natural resources are in compliance with proposed project.

17. In the following project development stages it is required to specify parameters of impact to environment, to develop detailed maximum permissible requirements of impact, to continue development of environmental protection measures and performance of environmental monitoring and control.


2. Legal framework

2.1 Legislation 18. Within the limits of established state policy under the direction of the President and Cabinet of Ministers (CM) in the RUz, great attention is paid to the execution of accepted ecological obligations. Nature conservation policy of RUz and implemented measures in the sphere of environmental protection (EP) and rational nature management are based on the following principles:

integration of economic and ecological policy for conservation and rehabilitation of environment as the necessary condition for increasing of the population’s standard of living;

transition from protection of some individual elements of nature to general and complex protection of eco systems;

responsibility of all members of society for EP, conservation of its biodiversity and improvement of condition, creation of conditions for favorable habitation of population.

19. National legislation regarding EP issues and sustainable nature management is based on the regulations of the Constitution of RUz. The Constitution of RUz was accepted on December 8, 1992, amended in accordance with the Law of RUz dated 28.12.1993, No. 989-XII, and the Law of RUz dated 24.04.2003 No. 470-II. Government, its organs, public officers, social associations, and citizens act in accordance with Constitution and laws. (Article 15). None of the regulations of Constitution can be interpreted to the prejudice of rights and interests of RUz. None of the laws or other normative-legal acts can contradict norms and principles of Constitution (Article 16).

20. In accordance with Constitution of RUz land, its resources, flora and fauna, and other natural resources are national wealth and are subjected to rational usage and protected by government. In Article 55 of Constitution of RUz it is said, “... land, its resources, flora and fauna and also other nature resources are the national wealth and should be rationally used and protected by state”.

21. On the basis of Constitution, the laws are taken by Oliy Majlis (OM), signed by the President of RUz and have the highest legal power. The President of RUz, on the basis and in pursuance of execution of Constitution and laws of RUz, issues orders, statements and decrees, having compulsory power on the whole territory of RUz (Article 94).

22. The Cabinet of Ministers (CM), in accordance with acting legislation, issues statements and decrees which are compulsory for execution on the whole territory of RUz by all organs, ventures, establishments, organizations, public officers and citizens (Article 98). Khokim, in the limits of authorization, submitted to him, takes decisions which are compulsory for execution by all ventures, establishments, associations and also public officers and citizens on corresponding territory (Article 104).

23. The State Committee for Nature Protection (SCNP) of RUz is subordinated to OM of RUz and carries out state control for keeping law by ministries, state committees, establishments and organizations and also by some legislative persons, in the sphere of usage and protection of lands, subsoils, water, forests, flora and fauna, atmosphere air.

24. The fundamental legislative act regulating nature conservation relations is the Law “On nature protection” No. 754-XII dated December 9, 1992 (last revision was made by Law of RUz No.59 dated 10.10.2006). This Law states legal, economic and organizational bases for keeping conditions of environment, rational usage of nature complexes. It has the aim to provide balanced harmonic development of relations between humans and nature, protection of ecological systems, nature complexes and separate objects, and guarantee rights of citizens for favorable environment.

25. The influence of economic activity on nature environment (NE) is limited by norms and quality standards of NE, guaranteeing ecological safety of population, production and protection of


nature resources. At formation of territorial production complexes, development of industry, agriculture, construction and reconstruction of cities and other settlements, maximum load norms for NE are stated.

26. Ventures, organizations and establishments should develop ecological and other criteria, stipulating maximum loads on environment. Ecological norms are stated by SCNP, Ministry of Health of RUz (MH RU), State Committee of RUz for control of safe industry works and mines inspectorate in accordance with their compensation.

27. Subsoils and minerals are used with condition: provision of complex and economic usage of production and related nature resources

and also avoidance of NE and subsoils pollution; re-cultivation of land, damaged during production operations; usage of regenerative minerals only in the limits of their natural renewal.

28. Treatment of wastes is carried out as per the order stated by Law. The owners of wastes have responsibility for safe treatment of wastes. Decision of issues on localization of waste treatment facilities on corresponding territory is carried out by public authorities.

29. State control in the sphere of EP is carried out by public authorities and regulatory bodies and state organs for nature protection, authorized for it specially. Specially authorized organs for nature protection are:

State Committee for Nature Protection of RUz (SCNP); Ministry of Health of RUz; Agency for control of safe industry works and mines inspectorate; Ministry of Internal Affairs of RUz; Ministry of Agriculture and water resources of RUz; State Committee for land resources of RUz.

30. Payments for special nature management and pollution of environment consists of taxes and also, compensation payments for pollution of the environment (emissions, discharge of contaminants and wastes disposal), payments for protection and restoration of nature resources.

31. Rates of taxes and sizes of other compulsory payments, including lease payment, for usage of nature resources considering their abundance, quality, restoration possibilities, availability, complexity, productivity, location, possibility of processing and utilization of wastes and other factors, and also corresponding limits are determined and approved by the order stated by Law.

32. Amount of compensation payments for pollution of the environment is approved by CM of RUz after submission by SCNP The amount of payments on protection and restoration of nature resources are stated by CM of RUz.

33. Payments for usage of nature resources are included to the cost of products (works, services) of ventures-users of natural resources. Compensation payments for pollution of the environment, and also for extra-limited (extra-normative) and other non-rational special nature management are charged from the profit of physical person.

34. Payment for usage of nature resources, their protection and restoration is made to State budget of RUz. Amounts of compensation payments for emissions and pollutants discharge to environment and wastes disposal are going to the funds of nature protection. Payment privileges for special nature management and compensation payments for pollution of environment are stated by Law.

35. Payment for usage of nature resources and compensation payments for pollution of environment do not release juridical and physical persons from execution of ecological measures and from responsibility to compensate for harm caused.


36. In RUz voluntary and compulsory insurance of property and profits of ventures, establishments and organizations, life and property of citizens is carried out for the case of damage which is the result of NE and worsening of quality of nature resources. The order and conditions of ecological insurance are stated by law of RUz.

37. In case of accident, the establishment or organization should immediately begin to address it in accordance with its plans of actions in emergency ecological situations. At the same time, they must immediately notify about accident and measures for its mitigation the local organs of state power and management, state organs for nature protection and also special departments on mitigation of harmful ecological effects of these accidents.

38. Ventures, organizations, establishments, individuals should implement waste-free and low waste technologies, reduce formation of production and consumption wastes, render harmless, treatment, keep the rules of their sorting, warehousing, disposal and utilization. Commissioning of facilities not complying with ecological requirements is forbidden.

39. It is forbidden to keep and dispose wastes on the lands of settlements, nature protective, health-improving, re-creational and historical-cultural places, in the borders of water protective zones and zones of sanitary protection of water objects and in other places where there is a risk to life and health of citizens and also for natural areas and objects which are specially protected.

40. Disposal of wastes in subsoils is permitted in exclusive cases, by the results of special investigations keeping requirements for provision of safety for life and health of citizens, environment, and safety of nature resources.

41. Treatment of wastes, disposal or storage of wastes on landfills is carried out with the permission of state organs for nature protection. It is forbidden to use raw materials, implement technological processes and issue ready products (including food products) without ecological or hygienic certificates and also with deviations from definite parameters. Ecological certification is also carried out in cases provided by Law. The order of ecological certification is approved by CM of RUz.

42. Besides, the Law “On nature protection” in RUz some other laws, regulating relations in different spheres of management and EP has been developed such as:

1) Law of RUz “On water and water usage” No. 837-XII dt May 6, 1993, came into force by the Regulation of Supreme Soviet of RUz “On order of promulgation of a Law of RUz “On water and water usage” No. 837-XII dt May 6, 1993 (last revision was made by Law of RUz No. 240 dt 25.12.2009).

2) Law of RUz “On protection of atmospheric air” No. 353-I dt. December 27, 1996, came into force by the Regulation of Oliy Majlis of RUz No. 354-I от 27.12.96г. “On promulgation of a Law of RUz “On protection of atmospheric air” (last revision was made by Law of RUz No.59 dt. 10.10.2006).

3) Law of RUz “On protection and usage of flora” No. 543-I dt. December 26, 1997, came into force by the Regulation of Oliy Majlis of RUz “On promulgation of a Law of RUz “On protection and usage of flora” No. 544 dt. December 26, 1997. (last revision was made by Law of RUz No. 82-II dt. 26.05.2000).

4) Law of RUz “On protection and usage of fauna” No. 545-I dt. December 26, 1997, came into force by the Regulation of Oliy Majlis of RUz “On promulgation of a Law of RUz “On protection and usage of fauna” (last revision was made by Law of RUz No.59 dt. 10.10.2006).

5) Law of RUz “On wastes” No. 362-II dt. April 5, 2002, came into force by the Regulation of Oliy Majlis of RUz.

6) Law of RUz “On order of promulgation of a Land Code of RUz” No. 598-I dt. April 30, 1998. (last revision was made by Law of RUz No.714-II dt. 03.12.2004).


7) Law of RUz “On state land cadastre” No. 666-I dt. August 28, 1998, came into force by the Regulation of Oliy Majlis of RUz “On promulgation of a Law of RUz “On state land cadastre” No. 667-I dt. August 28, 1998 (last revision was made by Law of RUz No. 621-II dt. 30.04.2004).

8) Law of RUz “On woods” No. 770-I dt. April 15, 1999, came into force by the Regulation of Oliy Majlis of RUz “On promulgation of a Law of RUz “On woods” No. 771-I dt. 15.04.99. (last revision was made by Law of RUz No.238 dt. 22.12.2009).

9) Law of RUz “On radiation safety” No. 120-II dt. August 31, 2000, came into force by the Regulation of Oliy Majlis of RUz “On promulgation of a Law of RUz “On radiation safety” No. 121-II dt. 31.08.2000. (last revision was made by Law of RUz No.133 dt. 18.12.2007).

10) Law of RUz “On protected nature territories” No. 710-II dt. December 3, 2004, came into force by the Regulation of Oliy Majlis of RUz “On promulgation of a Law of RUz “On protected nature territories” No. 711-II dt. December 3, 2004.

11) Law of RUz “On subsoils” is approved by Law of RUz No.444-II dt. 13.12.2002г. (last revision was made by Law of RUz No.133 dt. 18.12.2007.)

12) Law of RUz “On EIA” No. 73-II dt. May 25, 2000, came into force by the Regulation of Oliy Majlis of RUz “On promulgation of a Law of RUz “On EIA”.

43. As a whole, ecological legislation of RUz covers wide spectrum of issues and includes regulations in the following spheres:

protection of environment and its main components;

protection of eco systems and regulation of usage of nature resources;

evaluation of influence on environment and ecological expertise;

regulation of compensations for damage made to environment (including economical and administrative aspects);

regulation of property rights for nature resources.

44. Below is the list of legislative acts of RUz, regulating issues of EP, applied for the activity of Operator and based on the Laws of RUz:

1) Regulation of CM of RUz “On limited water use in RUz” No. 385 dt. August 3, 1993. (last revision was made by Regulation of CC of RU No.499 dt. 25.10.2004).

2) Regulation of Supreme Soviet of RUz “On reinforcement of protection of valuable and vanishing species of plants and animals and regulation of their usage” No. 937-XII dt. September 3, 1993.

3) Regulation of CM of RUz “On establishment of quotes for calculation of damages recovery, caused to flora of RUz” No. 293dt. July 27, 1995 (last revision was made by Regulation of CM of RUz No.95dt. 01.04.2005).

4) Regulation of Oliy Majlis of RUz “On approval of Regulations on State Committee of RUz for nature protection” No. 232-I dt. April 26, 1996. (last revision was made by Law of RU No.231 dt. 15.12.2009).

5) Regulation of CM of RUz “On approval of normative acts in accordance with the law of RUz “On subsoils” No. 19 dt. January 13, 1997. (last revision was made by Regulation of CM of RUz No.147 от 19.07.2007).

6) Annex No. 1 to the Regulation of CM “Regulations on the order of submission of allotments in the purposes, not connected with the mining of minerals” No. 19 dt. January 13, 1997. (last revision was made by Regulation of CM of RUz No.147 dt. 19.07.2007).


7) Annex No. 2 to Regulation of CM of RUz “Regulations on state control and supervision for usage and protection of subsoils, geological survey of subsoils and rational usage of mineral resources” No. 19 dt. January 13, 1997 (last revision was made by Regulation of CM of RUz No. 147 dt. 19.07.2007).

8) Annex No. 2 to Regulation of CM of RUz “Regulations on order of issuance of permissions for development of areas of minerals’ deposit” No. 20 dt. January 13, 1997. (last revision was made by Regulation of CM of RUz No. 323 dt. 10.07.2004).

9) Annex No. 3 to Regulation of CM of RUz “Regulations on order of charging off mineral resources from users, which were extracted and lost in the process of production” No. 20 dt. January 13, 1997. (last revision was made by Regulation of CM of RUz No. 323 от 10.07.2004).

10) Regulation of CM of RUz “On approval of Regulations on order of development and maintaining water cadastre of RUz” No. 11 dt. January 7, 1998 (last revision was made by Regulation of CM of RUz No. 183 dt. 14.04.2004).

11) Regulation of CM of RUz “On approval of Regulations on order of maintaining state cadastre for specially protected nature territories of RUz” No. 104 dt. March 10, 1998. (last revision was made by Regulation of CM of RUz No.95 dt. 01.04.2005).

12) Regulation of CM of RUz “On national strategy and plan of actions for keeping biological diversity” No. 139 dt. April 1, 1998 (last revision was made by Regulation of CM of RUz No. 359 dt. 19.09.2000).

13) Regulation of CM of RUz “On approval of Land Code of RUz” No. 599-I dt. April 30, 1998.

14) Regulation of CM of RUz “On program of actions for environment protection in RUz for 1999-2005 years” No. 469 dt. October 20, 1999 (last revision was made by Regulation of CM of RUz No. 183 dt. 14.04.2004).

15) Regulation of CM of RUz “On approval of some normative acts for woods protection of RUz” No. 506 dt. November 22, 1999. (last revision was made by Regulation of CM of RUz No.95 dt.01.04.2005).

16) Annex No. 1 to Regulation of CM of RUz “National strategy for reducing emission of greenhouse gases (main provisions)”;

17) Annex No. 2 to Regulation of CM of RUz “Measures for realization of National strategy for reducing emission of greenhouse gases”.

18) Regulation of CM of RUz “On approval of Regulations on order of maintaining state cadastre for objects of flora of RUz and Regulations on order of maintaining state cadastre of fauna of RUz” No. 343 dt. September 5, 2000. (last revision was made by Regulation of CM of RUz No.95 dt. 01.04.2005).

19) Regulation of CM of RUz “On approval of Regulations on order of definition of woods protection category” No. 215 dt. June 5, 2000 (last revision was made by Regulation of CM of RUz No.95 dt. 01.04.2005).

20) Regulation on state EIA in RUz, approved by Regulation of CM of RUz No.491 dtd. 31.12.01. (last revision was made by Regulation of CM of RUz No.152 dtd. 05.06.2009).

21) Regulation on order of application of compensation payments for pollution of environment and disposal of wastes on the territory of RUz, approved by Regulation of CM of RUz No.199 dt. 01.05.03. (last revision was made by Regulation of CM of RUz No.15 dt. 06.02.2006).

22) Regulation on measures for subsurface water usage regulation, amplification of their protection from pollution and exhaustion, approved by Regulation of CM of RUz No.179 dt. 08.04.1992.


23) Regulation on water protective zones of storage ponds and other pools, rivers and main canals and collectors and also drinking water and domestic water supply sources, sanatory and cultural and health improving sources in RUz, approved by Regulation of CM of RUz No.174 dt. 07.04.1992. (last revision was made by Regulation of CM of RUz No.411 dt. 24.09.2003).

24) Regulation on state environmental monitoring in RUz, approved by Regulation of CM of RUz No.111 dt. 03.04.2002.

25) Decree on measures for improvement of procedure for issuance of licenses for the right to use subsoils parts, approved by Resolution of the President of RUz No. ПП-649 dt. 07.06.2007.

26) Instructions for carrying out inventory of pollution sources and normalization of pollutant emissions into the atmosphere for the ventures of RUz, approved by the Order of Chairman of State Nature Committee of RUz No. 105 dt. 15.12.2005. Registered in the Ministry of Justice of RUz No. 1533 dt. 15.12.05.

27) Order on approval of permit document samples for special usage of flora and Instructions on procedure for execution and registration of permits for felling of trees and shrub woods beyond state forestry fund and also for mowing (hay cutting) and ranging on reserve lands beyond state forestry fund, approved by the Order of Chairman of State Nature Committee of RUz No.01- 705 dtd 15.05.2007. Registered in the Ministry of Justice of RUz No. 1686 dt. 04.06.2005.

28) Order on approval of Rules for provision of public services by transportation of hard and liquid consumption wastes, approved by the Order of the Ministry of Public Services of RUz No.647 dt. 20.02.1999. Registered in the Ministry of Justice of RUz No. 647 dt. 20.02.1999.

29) Decree No. ПП-525 dt. 06.12.2006 of the President of RUz “On measures for realization of investment projects under Clean Development Mechanism of Kyoto Protocol”.

30) Regulation No. 9 dt. 10.01.2007 of CM of RUz “On approval of Regulation on the order of preparation and realization of investment projects under Clean Development Mechanism of Kyoto Protocol”.

45. Besides internal legislative acts, RUz has joined to the following international conventions of EP.

1) Framework Convention of United Nations Organization “On climate change” dt. 1992. RUz adhered to the present convention in 1993.

2) Montreal protocol “On substances destroying ozone layer” (Montreal) dt. September 16, 1987. RUz adhered to the present convention in 1993.

3) Vienna Convention “On ozone layer protection”. RUz adhered to present convention in 1993.

4) Convention “On prohibition of military or any other hostile use of environmental modification techniques”, Geneva, December 10, 1976. For RUz it came into force from 26.05.1993.

5) UN Convention “On desertification in the countries suffering a serious drought and/or desertification, especially in Africa” (Paris) dt. June 17, 1994. RUz adhered to the present convention in 1995.

6) UN Convention “On biological diversity” dt. 1992. RUz adhered to the present convention in 1995.

7) Paris Convention, 16-23.11.1972 “On protection of world cultural and nature heritage”. RUz adhered to the present convention in 22.12.1995.

8) Basel Convention “On control for transboundary movement of hazardous wastes and their disposal” (Basel) dt. March 22, 1989. RUz adhered to the present convention in 1996.


9) Convention “On international trade in the endangered species of wild fauna and flora” (Washington) dt. March 3, 1973 and Resolution on protection of spawning fish to above Convention (Harare) dt. June 9-20, 1997. Decree of Oliy Majlis of RUz dt. 25.04.97 N 433-I. It came into force for RUz from 08.10.1997.

10) Moscow Agreement, 12.04.96. “On control for transboundary movement of hazardous and other wastes. It came into force for RUz from 21.11.97.

11) Amendments to Montreal Protocol (London) dt. June 29, 1990, Amendments to Montreal Protocol (Copenhagen) dt. November 25, 1992. RUz adhered to the present convention in 1998.

12) Convention “On conservation of migratory species of wild animals”, signed in Bonn in June 23, 1998. RUz adhered to the present convention in 1998.

13) Kyoto Protocol to Framework Convention “On climate change”, signed in December 11, 1997 in Kyoto. RUz adhered to the present Protocol in 1999.

14) UNESCO Convention “On wetlands of international importance, mostly as ecotope of swimming birds”, made in Ramsar city in February 2, 1971. Protocol about amendments to Ramsar Convention dt. May 28, 1987. Protocol on amendments to Ramsar Convention dt. December 3, 1982. RUz adhered to the present Convention and its protocols in 08.02.2002.

15) Hague Agreement, 16.06.95. “On protection of Afro-Eurasian migrating wetland birds”. Decree of OM of RUz dt. 12.12.2003 No.577-II. It came into force in RUz from 01.04.2004.

16) International Paris Convention, December 2, 1961. “On protection of new kinds of plants. Decree of OM of RUz dt. 27.08.2004. No. 680-II

46. All above mentioned international conventions, which RUz has joined, have indirect impact on Operator activities regarding the KGF Project as all of them were implemented into internal legislation.

47. Legislation of RUz provides priority of international agreements regarding national legislation of RUz. For example, Article 53 of Law of RUz “On nature protection” requires that “in cases, when international agreement, concluded by RUz, states rules other than containing in the present Law or other legislative act of RUz on nature protection, the rules of international agreement are applied, excluding cases when legislation of RUz established more strict requirements”.

48. A more complete list of normative-legislative acts, applied to the activity of Operator in the sphere of EP, is given in “Classifier of documents, containing normative-legislative and normative requirements, applicable to the activity of “LUKOIL Uzbekistan Operating Company” LLC in the sphere of industrial safety, labor and environment protection”.

2.2 Institutional framework 49. The Constitution and legislative norms and rules of RUz determine the organs of legislative, state and executive authorities and also ventures and organizations, which are responsible for EP and sustainable nature management.

50. Different organs of state (ministries and authorities) and economic management (associations and companies), local government bodies (khokimiats), separate big ventures, scientific establishments, non-governmental non-commercial organizations all have obligations under the Framework Convention on Climate Change (FCCC), Convention on Biological Diversity (CBD) and Convention to Combat Desertification (CCD). SCNP of RUz is responsible for execution of regulations of CBD. National organ, coordinating activity on execution of obligations of SCNP and CBD is the center of Hydro-Meteorological Service Department at CM of RUz (Uzhydromet). Development and coordination of execution of strategies and activity plans in accordance with the obligations of conventions is also the part of functional obligations of theses authorities.


51. The supreme State body implementing legislative power in RUz, is Oliy Majlis (Parliament). It defines state policy, takes legislative ecological acts, coordinates and manages the activity of ministries and agencies regarding EP issues. Cabinet of Ministers is the Executive body and implements state nature protection policy, coordinates development and realization of state programs of socio-economic development, controls their execution and is responsible for registration and evaluation of nature resources. Obligations of regions regarding EP are put to the Soviets of National Deputies, headed by the Leader of administration (khokims). Regional and local organs establishes main directions of EP on its territory, register and evaluate the condition of nature resources, ecologically harmful facilities and is responsible for control, nature protection and usage of nature resources. The Supreme Executive body in the sphere of nature protection in RUz is SCNP, subordinated and accountable to Oliy Majlis.

52. Execution of nature protective measures, control function and responsibility regarding some nature protective spheres rests on a number of ministries and agencies. Responsibilities of these bodies include provision of stable system of state service, activity for development and realization of specialized programs, strategies and plans of actions by NP and sustainable nature management. Establishments of regional levels are actually lower executive bodies of SCNP and other responsible ministries on regional and district levels. Organizations on regional level have the same structure as on republican level.

53. Gathering of citizens (makhalla) is the independent organ of self-government, which carries out general initiatives and measures, including those connected with ecology, directly in villages, regions, districts and cities. The main principles of makhalla are democracy, publicity, social justice, humanism and mutual aid. Makhalla is responsible for taking decisions regarding problems of local importance, including issues of improving and development of infrastructure, arrangement of khashars (voluntary unpaid work on Sunday) and provision of social aid to low-income families, etc.

2.3 PSA Environment Protection Requirements

54. Production Sharing Agreement (PSA) for the KGF, Khauzak and Shady blocks, and Kungrad block between the Republic of Uzbekistan and consortium of investors consisting of the Oil Company OAO LUKOIL and The National Holding Company Uzbekneftegas, dated June 16, 2004. On the same date, June 16, 2004, the Oil Company “LUKOIL” transferred its rights and duties under the PSA to the company “LUKOIL Overseas Uzbekistan Ltd.”. Transfer of rights and duties was approved by the Decree of Cabinet of Ministers of RUz № 428 dated September 14, 2004. On November 24, 2004 the PSA entered into force (became effective).

55. According with PSA term «Investor» shall mean “LUKOIL Overseas Uzbekistan Ltd.” and NHC «Uzbekneftegaz».

56. According with PSA term «Operator» shall mean the company which performs Oil and Gas Operations provided by the PSA on Contract Area (KGF, Khauzak and Shady blocks, and Kungrad block), established and registered within the territory of the RUz in accordance with the legislation of RUz - “LUKOIL Uzbekistan Operating Company”, LLC.

57. According with PSA term «Authorized Body» shall mean Ministry of Economy of the RUz as an authorized governmental body for execution of PSA on behalf of the RUz.

58. On the basis of Article 23.3 of the Production Sharing Agreement (PSA) for the Kandym and Khauzak-Shady sites, the Investor must adhere to the acting legislation, regulating standards (norms, rules) for safe operation, environment and health protection. In Annex 6 of PSA the strategy of Environment Protection (EP) is described, which should be followed both by Investor and Operator.

59. In accordance with the requirements of Section 23.6 and Attachment 6 to PSA in order to establish system of control over environment protection Subcommittee for environment protection (Subcommittee) was set up. Subcommittee consists of 8 (eight) members, at that 4 (four) members are appointed by Investor (from among employees of Operator) and 4 (four) members are appointed


by Authorized Body from among representatives of state regulatory agencies of the Republic of Uzbekistan. Subcommittee shall perform its activity in accordance with approved Regulations and Work Schedule, it shall be convened at least four times a year for discussion of issues and joint decision making in HSE sphere. Decisions of Subcommittee shall be documented with appropriate Minutes of Meeting and shall be binding upon Operator. Subcommittee (see Picture 1) develops policy in the sphere of EP, including the following:

development of control system for EP as the component part of oil-and-gas operations and establishment of Subcommittee by Managing Committee (MC);

the order of establishment and organizational structure of Subcommittee is provided in proposal of Investor which is submitted to MC for approval. Subcommittee includes representatives of Investor and Authorized Body, which under the decision of Authorized body;

Subcommittee develops HSE Program (Program), which accepted by Authorized Body after agreement with SCNP of RUz;

Development of above-mentioned Program by Subcommittee is carried out only after independent evaluation of initial ecological condition in the Contract Area (KGF, Khauzak and Shady blocks, and Kungrad block);

Stage by stage implementation of the Program is carried out in the order corresponding to common stages of oil-and-gas operations (examination of initial condition, exploration, exploratory boring, field development, production, well abandonment, infrastructure of deposits, where oil production is completed) in accordance with approved work programs and budget.

60. Functions of Subcommittee:

Ecological Monitoring:

development and correction of program for continuous production ecological monitoring;

coordination of monitoring program;

examination of results and giving proposals for improvement of monitoring program;

publication of annual report.

Selection of scientific-research programs:

administration of scientific-research programs for EP;

assigning means provided for this purpose in related annual work programs and budgets;

control of work process;

publication of results.

Management of environment protection:

selection and evaluation of effectiveness for applied nature protective measures;

participation in development of programs for prevention and reduction of impact intensity of production emissions and wastes on environment.

61. Nature protection control and safety. Operator performs oil-and-gas operations with proper honesty, effectiveness and safety in accordance with the Legislation of RUz for safety procedures and also in accordance with the international standards in oil-and-gas industry


(considering, that these standards and experience do not contradict the legislation) on safety and EP. Operator has ISO 14001 and OHSAS 18001 certification.

62. Operator takes all reasonable measures in accordance with these laws and standards in order to minimize any potential violations of general balance of environment, including, but not limited to, land surface, subsoils, air, lakes, rivers, flora and fauna, crops and other natural resources. Sequence of actions is determined in the following order: life protection, EP and property protection.

63. Operator develops integrated management system, covering all aspects of health, safety and EP regarding works implemented in connection with oil-and-gas operations, on condition that:

Operator develops Program for Contract Area (KGF, Khauzak and Shady blocks, and Kungrad block) on the basis of examination of initial ecological condition. Data on ecological condition of Contract Area is provided to Operator by Authorized Body. Expenses incurred in connection with preparation and implementation of the program are to be expenses for oil-and-gas operations. Registration of stated expenses is implemented by Operator separately for Contract Development Area (means KGF, Khauzak and Shady Block) and Contract Exploration Area (means Kungrad Block).

Operator is to use actual (in force within the RUz), as well as develop and agree with the SCNP of RUz, standards and methods for safety and environmental protection suitable for control of Oil and Gas Operations and instructions; and


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analytical methods on emissions, discharges and wastes. Standards on safety and environmental protection are to take into consideration specific ecological characteristics of the Contract Area and based on Legislation on safety and environmental protection, and, if applicable, on standards and experience of international oil and gas industry with their usage in operations for exploration and production in other parts of the world.

64. In compiling such standards and methods, there should be taken into account such notions as environmental protection goals, technical marketability, economical and commercial efficiency. When new safety and environmental protection standards developed and agreed between the SCNP of RUz and the Operator come into force under the PSA, the methods and standards previously developed shall no longer be applied, and thereafter such new methods and standards shall instead be applied to Oil and Gas Operations under PSA.

65. Emergency situations, environmental disruption. In case of emergency situations or accidents including, but not limited to, explosions, emissions, discharges and other incidences causing or able to cause environmental damage, the Operator shall promptly inform the Authorized Body and appropriate Public Authorities, including SCNP of RUz, about these circumstances with the indication of approximate quantity of emissions and inform on prompt measures taken by it to rectify the situation, and on the results of such measures.

66. The Operator shall apply all required efforts to undertake prompt measures, control the emergency situation and do its utmost to prevent deaths, damages to natural recourses and overall environment, and property loss and damage. The Operator shall also report to SCNP of RUz and appropriate Public Authorities of the RUz about the measures taken.

Monitoring:

The initial ecological information on background pollution level of the Contract Area shall be submitted by the Authorized Body to the Operator.

Appropriate industrial control will be provided by the Operator or its contractors under the Oil and Gas Operations.

2.4 Requirements to EIA Procedure 67. The Operator shall also report to SCNP of RUz and appropriate Public Authorities of the RUz about the measures taken. Requirements to the content, development procedure and examination of Environment Impact Assessment (EIA) documents are governed by the following legislative acts of the Republic of Uzbekistan:

1) Law of the Republic of Uzbekistan No 754-XII dated 09.12.1992 «On Environment Protection»;

2) Law of the Republic of Uzbekistan No 73-II dated 25.05.2000 «On Environmental Impact Audit»;

3) Regulation «On State Ecological Expertise in the Republic of Uzbekistan», approved by the Decree of the Cabinet of Ministers of the Republic of Uzbekistan No 491 dated 31.12.2001.

68. EIA documents consisting of the following stages are being developed for designed facilities in accordance with the given requirements:

DEIA - Draft Environmental Impact Assessment, which shall be developed in the conception stage of planned or anticipated economic or other activity prior to the beginning of project financing (1 stage of EIA);

EIA - Environmental Impact Assessment, which shall be developed if, based on the results of DEIA State Environmental Expertise (SEE), it was ascertained that additional surveys, on-site investigations, special analyses, simulation experiments and development of well-founded environmental actions are required (2 stage of EIA). Necessity of EIA development


shall be defined by State Committee on Nature Protection of the Republic of Uzbekistan based on the results of DEIA state environmental expertise.

EEA - Ecological Effect Assessment, which shall be developed prior to commissioning of the project and shall be final stage of EIA procedure for designed facilities (3 stage of EIA).

69. Based on the results of development EIA documents shall be submitted for State Environmental Expertise to State Committee for Nature Protection of the Republic of Uzbekistan.

70. Operator has already completed EIA procedure within the framework of potential impact assessment of field facilities construction at KGF section and respectively EIA documents for a number of facilities/kinds of activities have passed state ecological expertise (see Table 1).

Table 1. Status of the Environmental Impact Assessment procedures for the Kandym project

Activity Stages of the EIA, number of the State Environmental Expertise (SEE)

resolution by the State Committee for Nature Protection Note DEIA* EIA* EEA*

Seismic surveys 2D 18/92z of 25.02.2008 Not applicable 18/318з of 04.07.2008 Work was done in 2008-2009

Depreservation and testing of the exploratory wells

18/360z of 03.11.2006 Not applicable E-7-156 of 29.03.2007 Work was done in 2007

Gas Processing Plant construction and field development

18/51z of 22.02.2007 Not applicable Q3-4 2013

It is planned to work out separate EEAs for the Gas Processing Plant and EEA for the developmental facilities**.

Exploratory wells construction 18/15 of 23.05.2007 Not applicable 18/515z of 02.10.2009

Border check-point construction (No.3)

E-7-320 of 06.07.2007 Not applicable Not applicable Work was done in 2007

Water wells construction

E-7-461z of 15.12.2008

Not applicable E-7-403z of 16.11.2009 Work was done in 2010

Temporary external electricity supply

E-7-96z of 18.03.2009

Not applicable Not applicable

Construction of the camp for the construction survey service

E-7-386z of 30.09.2009 Not applicable Q1-2 2011

Note: * DEIA - Draft Environmental Impact Assessment; EIA - Environmental Impact Assessment, EEA - Ecological effect assessment. ** Developmental facilities include access roads, rail road, permanent residential camp, wastewater treatment plants, water wells, electricity substation, transmission lines, and other infrastructure facilities.

2.5 Environmental Standards 71. Applicable Uzbek standards on pollutant emissions to atmosphere correspond to the requirements of World Bank‘s Environment, Health and Safety General Guidelines (2007) is in the Table 2.

Table 2. Air Emissions

Pollutants World Bank (1) WHO Ambient Air Quality Guidelines(1) g/m3 Uzbekistan(2)* LUOC(3) SO2 20 (g/m3 (mpdc)

500(g/m3 (motc) 24-hour - 125 (Interim target-1) 50 (Interim target-2) 20 (guideline) 10 minute - 500 (guideline)

200g/m3 (mpdc) 500g/m3 (motc)

500 g/m3 motc

NO2 40g/m3 (mpac) 40 mpac 40g/m3 (mpac)


200g/m3 (motc) 200 motc 85g/m3 (motc) 85 g/m3 motc PM 10

20-150g/m3

1 year - 70 (Interim target-1) - 50 (Interim target-2) -30 (Interim target-3) -20 (guideline) 24 hours -150 (Interim target-1) - 100 (Interim target-2) - 75 (Interim target-3) - 50 (guideline)

50g/m3 (mpdc)

150g/m3 motc 50g/m3 (mpdc)

PM 2.5 10-75 g/m3 1 year - 35 (Interim target-1) - 25 (Interim target-2) - 15 (Interim target-3) - 10 (guideline) 24 hours -75 (Interim target-1) - 50 (Interim target-2) - 37.5 (Interim target-3) - 25 (guideline)

150g/m3 (motc)

H2S 5 mg/Nm3 0,008 mg/Nm3 0,008 mg/Nm3 Notes: * Sanitary Norms and Regulations of the Republic of Uzbekistan No. 0179-04 specify the values of maximum concentration for the following time periods: mpdc – maximum permissible daily concentration (24 hours); motc – maximum one-time concentration (10 minutes – 1 hour); mpac – maximum permissible annual concentration (1 year). The regulation of pollutant emissions in Uzbekistan is made with the use of maximum one-time concentration values (motc, 10 minutes – 1 hour). (1)

Based upon the World Bank‘s Environment, Health and Safety General Guidelines (2007) and HSE Guidelines for Onshore Oil and Gas Development (2007). (2)

Based upon the Sanitary Norms and Regulations of the Republic of Uzbekistan No. 0179-04 “Hygienic regulations. List of maximum permissible concentration (MPC) of pollutants in community ambient air on the territory of the Republic of Uzbekistan” approved by the Chief State Health Officer of the Republic of Uzbekistan. (3)

Specified by the first stage of EIA procedure (Draft Environmental Impact Statement for Preliminary Feasibility Study of “Construction of GPP complex and development of Kandym group of fields”), which has passed State Environmental Expertise in the State Committee for Nature Projection of the Republic of Uzbekistan. (4)

Based on World Health Organization (WHO). Air Quality Guidelines Global Update, 2005.

72. Therefore, applicable Uzbek standards on pollutant emissions to atmosphere correspond to the requirements of World Bank‘s Environment, Health and Safety General Guidelines (2007) and are even more stringent on certain parameters.

73. Applicable Uzbek standards on wastewater discharges correspond to the requirements of World Bank‘s Environment, Health and Safety General Guidelines (2007) is in the Table 3.

Table 3. Wastewater Discharges (mg/l except for pH)

Parameters World Bank(1) Uzbekistan(2) LUOC(6) Total Hydrocarbon Content 10 2-3 2-3 pH 6 − 9 6-9 6-9 BOD 25 20-25 20-25 COD 125 40-65 40-65 TSS 35 7-10 7-10 Phenols 0.5 0,1-0,15 0,1-0,15 Sulfides 1 0,1 0,1 Heavy Metals(3) 5 4,7(4) 4,7(4) Chlorides 600 (average),

1,200 (maximum) 250(5) 250(5)

Notes: (1) Based upon the World Bank‘s Environment, Health and Safety General Guidelines (2007) and HSE Guidelines for Onshore Oil and Gas Development (2007). (2) Based upon the Oz’RH 84.3.5:2004 “Instructional guidelines for calculation of norms of maximum permissible discharges of pollutants to the bodies of water and on surface taking into account technically achievable wastewater treatment measures” (RD approved by the State Committee for Nature Projection of the Republic of Uzbekistan). (3) Heavy metals include: arsenic, cadmium, chromium, copper, lead, mercury, nickel, silver, vanadium and zinc. The total heavy metal concentration will exclude highly toxic metals such as mercury, lead and cadmium. (4) Based upon the Oz’DSt 950:2000 “Potable water. Hygienic requirements and quality control” (State Standard of the Republic of Uzbekistan). Including arsenic, cadmium, chromium, copper, lead, mercury, nickel, silver, vanadium and zinc, ferrum and aluminum.


(5) Based upon the Oz’DSt 950:2000 “Potable water. Hygienic requirements and quality control” (State Standard of the Republic of Uzbekistan). (6) Specified by the first stage of EIA procedure (Draft Environmental Impact Statement for Preliminary Feasibility Study of “Construction of GPP complex and development of Kandym group of fields”), which has passed State Environmental Expertise in the State Committee for Nature Projection of the Republic of Uzbekistan.

74. Therefore applicable Uzbek standards on wastewater discharges are considerably more stringent than the requirements of the World Bank‘s Environment, Health and Safety General Guidelines (2007).


3. Project Description

75. The RUz assigns high priority to development of industrial potential, primarily the fuel and energy sector, as the basis for economic growth of the country and strengthening of its energy independence. In this connection, the oil and gas industry plays the priority role as one of the major sectors of industry of the country.

76. Significant reserves of hydrocarbons have been found in the RUz, and their development is concerned with certain difficulties (remoteness, lack of capital, increased content of hydrogen sulfide) that necessitate a closer cooperation with foreign investors for bringing in advanced technologies and additional funds.

77. In the recent years the country has accumulated the experience in construction of environmentally sound facilities of oil and gas industry with participation of foreign capital and technology. Friendlier investment climate has been created for attraction of foreign investments.

78. The purpose of this Project is the development of the KGF and the associated gas processing plant. The capacity of the field and the gas processing plant is estimated up to 8 billion m3/year of natural gas, more than 200 thousand tonne/year of gas condensate and about 190 thousand tonne/year of sulfur.

79. “LUKOIL Uzbekistan Operating Company” (as Operator by the PSA ) is planning to develop production wells, cluster sites, gathering points, in-field pipelines, gas processing plant, and to build trunk gas pipeline and infrastructure facilities. Drilling of production wells and the KGF is planned for 126 wells, including 28 ones at the satellite fields.

80. Initial drilling activities at KGF have already begun. Construction works of facilities at KGPP is scheduled to begin in 2014 (railway) and complete in 2019 (3 stage KGPP). Thus, the commissioning of field facilities of Kandym group of fields will continue over the next 20 years from the date of commencement of complex construction. According to the PSA the whole complex (facilities of Kandym group of fields) will be operated until 2039 by the Operator. The preliminary construction schedule for developing various project facilities is shown in Table 4.

81. The aim and necessity for development of the KGF are governed by the need for general economic development of the RUz’s economy in which the development of natural resources play a key role. The development of KGF will also provide socio-economic benefits and raise the living standards of the complex’s personnel, many of whom will be residents from the nearby communities.

82. The target activity will maximize the use of natural resources by increasing the recovery of hydrocarbons and associated products by attracting critical technical knowledge and foreign capital. The target activity separates methane from valuable components found in the natural gas: propane-butane fractions, gas condensate and sulfur. Methane and its valuable components are then utilized for productive economic use. KGF also helps in deepening international cooperation and trade as most of the product is exported to neighboring Central Asian and other countries.


Table 4. Preliminary Construction Schedule

Item No Facility

Stages of the EIA, number of the State Environmental Expertise Beginning of

construction Completion of construction

DEIA* EIA* EEA*

1 Railway 18/51z of

22.02.2007 Not applicable Q3-4 2013** January 2014 January 2016

2 Exploratory wells E-7-461z of 15.12.2008

Not applicable E-7-403z of 16.11.2009

September 2009 TBD

3 Gathering facilities (Kandym field)

18/51z of 22.02.2007 Not applicable Q3-4 2013*** September 2015 September 2017

4 1 stage GPP 18/51z of

22.02.2007 Not applicable Q3-4 2013*** March 2015 September 2017

5 2 stage GPP September 2017 March 2018 6 3 stage GPP March 2018 September 2019

7 Shift camp E-7-386z of 30.09.2009

Not applicable Q1-2 2011 July 2015 January 2017

8 Main gas pipeline 18/51z of 22.02.2007 Not applicable Q3-4 2013** March 2016 September 2017

9 External power supply E-7-96z of 18.03.2009 Not applicable Not applicable March 2016 September 2017

10 Water intake and water duct E-7-461z of 15.12.2008 Not applicable E-7-403z of

16.11.2009 September 2016 September 2017

11

Development of Satellite Fields (West Khoji, Khoji, Parsankul and Kuvachi Alat)

Will be done but date TBD

Will be done but date TBD

Will be done but date TBD After 2024 TBD

12 Turn over of GPP facilities to Uzbekneftegaz as per PSA

- - - 2039 2039

Note: *DEIA - Draft Environmental Impact Assessment; EIA - Environmental Impact Assessment, EEA - Ecological effect assessment; TBD – To be determined. ** Separate EEA for the all developmental facilities, including gathering facilities, access roads, rail road, permanent residential camp, wastewater treatment plants, water wells, electricity substation, transmission lines and other infrastructure facilities. *** Separate EEA for the Gas Processing Plant (1-3 stages).

83. The fields of the KGF are in the Karakul District of Bukhara Province of the RUz. The border with Turkmenistan is to the south and south-west of the area (see Picture 2).

84. The nearest populated settlements are the towns of Karakul and Alat Districts located 25 km (Alat) and 30 km (Karakul) from the Kandym field and 10-15 km from the south-east boundary of the KGF. Rural settlements (villages), called kishlaks (Jigachi, Mirzakala, Kuwacha, Chandyr, Vahim, Ketmandugi, Arabkhona, Carakhodja, Asiya) are inhabited by about 50 to 1200 people and situated inside KGF. The linear distance of these kishlaks and towns to the GPP is shown in Table 5. The houses in these villages are made of clay, with flat roofs. Streets are mainly narrow and curved. The majority of kishlaks are electrified and landscaped. The sources of water supply are rivers, ditches and wells. Water in rivers and ditches is fresh, in wells it is saline. Gasli town is located in 35 km to the north of the Contract Area.


Table 5. Distance of Kishlaks and Towns to the Contract Area

Name of Kishlak/Town Distance to GPP, km Distance to contract area boundary, km

Kishlaks

Jigachi 21.0 Inside Contract Area Mirzakala 19.5 Inside Contract Area

Kuwacha 24.0 Inside Contract Area

Chandyr 27.0 Inside Contract Area

Vahim 23.5 Inside Contract Area

Ketmandugi 26.0 Inside Contract Area

Arabkhona 23.5 Inside Contract Area

Karahodja 20.5 Inside Contract Area

Asiya 22.0 Inside Contract Area

Towns

Karakul 33.5 12.5 Gazli 55.5 32.6 Alat 37.0 9.0

85. The vicinity and layout map of KGPP is shown in Picture 3. This map also shows the corridors for main ancillary infrastructure including the rail road, access road, power transmission line, water supply pipeline, and communications corridor. The General Layout Plan of Gas Fields is shown in Picture 4. This plan shows the field limits, collection рoints and main pipelines.

86. A conceptual layout of the GPP complex and related Infrastructure development is given on Picture 5. Schematic diagram of gas gathering of the KGF is given on Picture 6.

87. Detailed map showing the existing and projected well development is found in Attachment 2. Based on the specific conditions of the field (large quantity of wells, large size of the field, high hydrogen sulfide content), cluster system of well product gathering is designed.

88. The gas-gathering system of the Kandym block includes five gathering points/stations receiving products from 126 wells. Flow lines of 112 production wells are connected to 25 production manifolds located at the cluster sites. Flow lines from 14 wells are connected directly to inlet manifolds of the gathering stations.

89. Picture 7 shows basic process flow chart of cluster site. Flare system will allow the burning of hydrocarbons and discharge of accumulated process gas during maintenance and emergency situations.


Picture 2. Kandym and Khauzak-Shady Region

Kandym Field

Symbolic Notations

State frontier Gas pipeline

Khauzak-Shady

field facilities

Kandym field

Khauzak-Shady Field

Alat

Charjow

Karakul


Picture 3. Vicinity and Layout Map of KGPP


Picture 4. General Layout Plan of Gas Fields


Picture 5. Conceptual Layout of GPP Complex and Related Infrastructure Development


GPP

PETEC Supplement of process chart of development of the KGF (Kandym, Kuvachi-Alat, Akkum, Parsankul, Khoji, West-Khoji)

Attachment No 36 Flowchart of gathering system at the KGF as per recommended development option (Option 3)

Symbol legend: state border license site border gas-water contact water bodies roads residential area border operational project wells exploratory wells

drilled wells being re-entered

backup well gas collecting network in a cluster

Design sitting of bottom holes of producing wells as per recommended 2000 m grid option

Месторождение Парсанкуль – Parsankul Field Месторождение Аккум – Akkum Field Месторождение Западный Ходжи (район скв.14) – West Khoji Field (Well 14 area) Граница лицензионного участка – License site border Месторождение Западный Ходжи (район скв.12) – West Khoji Field(Well 12 area) Месторождение Западный Ходжи – West Khoji Field Граница лицензионного участка – License site border Месторождение Ходжи –Khoji Field Месторождение Кандым – Kandym Field ГПЗ - Gas processing plant Дорога – Road Озеро Шуркан (сол) – Shurkan lake (saline) Месторождение Кувачи-алат- Kuvachi-alat Field

Picture 6. Development Scheme of the KGF


90. For high-sulfur deposits, the top priority is the high reliability of the system of collection, treatment and transportation of gas. The produced formation fluid is hydrogen sulfide containing hydrogen sulfide on horizons varying between 1.43 and 2.51 % mol. Majority of strata are characterized with high gas influx without bearing out of formation water. Inflow of formation water is anticipated in the process of operation.

91. Formation water is highly mineralized, the overall mineralization varies between 100 and 305 g/L. Maximum water cut (content) of the deposit is forecasted on the level of 25 gr/m3 upon reduction of formation pressure to 13.5 – 13.0 MPa.

92. The condensate of KGF is light (by breakup), gasoline, sulfurous (contain sulfur) and belongs to methane-aromatic type.

93. During initial years of production, wellhead pressure will be quite high and will be controlled at the inlet to GPP by regulating valves. In further years of production, wellhead pressure will decline and will require gas compression at gathering station to maintain design pressure at inlet to GPP.

94. Picture 8 presents configuration of the booster compressor station (BCS). In the initial period, single-stage gas compression will be necessary (stage 1). Further, before the end of the operation period, double-stage gas compression will be necessary at the gathering station (stage 2) for the purpose of maintaining constant pressure at outlet of gathering station in case of reduction of pressure at inlet therein. Flare system is proposed for combustion of gaseous hydrocarbons in emergency situations as well as in the process of relief of equipment and pipelines.

95. Flow lines from well clusters entering into the gathering station inlet lines will be fitted with safety valves for protection against overpressure (safety valves of type SPPK via three-way valves will be piped to flare). Through valves, each flow line will be piped to flare for blow-off in case of accumulation of liquid. In addition, shutoff valves, adjustable choke, check valve will be installed on the flow line. Metering separators will be fitted with safety valves with draining to flare and piping flare line for emptying of units before repair. Drainage from metering separators comes to underground drainage tank. From gas-gathering collector via angle regulating valve, fuel gas is taken off for flare. United flow of gas after gathering station through gas-field gathering main is transferred to the production site of GPP.

96. GPP is purposed for preparation and treatment of crude gas of the KGF and receiving of saleable product: saleable natural gas, stable condensate, liquefied gas and gas sulfur. Schematic diagram of GPP is given on Picture 9.

97. The GPP production project includes the common receiving module, common facilities for condensate stabilization, three process lines for acid gas removal, three process lines for gas drying, three process lines of low-temperature separation and three sulfur production lines. The receiving module is designed for receiving and processing of flow of well products. Condensate and formation water will be separated from the common flow of humid gas. Separated sulfur-containing gas will be directed to acid gas removal units.

98. The condensate stabilization unit provides stabilization of formation condensate, condensate from low-temperature separation unit and other condensed hydrocarbons from various units at GPP. Cooled saleable condensate will be contained in condensate storage tanks. Saleable condensate will pumped through transfer metering station to condensate shipment point.

99. The acid gas removal unit will allow removal of hydrogen sulfide (H2S), carbon oxysulfide (COS) and carbon dioxide (CO2) from crude gas through chemical absorption. Activated solvent of methyl diethanolamine will be used as solvent for acid gas removal.

100. Recovered acid gases are sent to elemental sulfur production unit. Purified gas from this unit will meet the technical specification for saleable gas for content of H2S. In the course of this process, some amount of coming mercaptans is removed as well.


Эксплуатационный

коллектор

Замернойколлектор

Природны

йгазсо

скважин

Природный газ на СП

Факел

Замерной сепаратор

Факельный сепаратор

Насос откачки жидкости

Насос откачки жидкости

Picture 7. Basic Process Flow Chart of Cluster Site

Natural gas from wells

Production collector

Flare

Flare separator

Liquid pump

Natural gas to gathering

Liquid pump

Metering separator

Metering collector


Топливный газ сред.давл.От системы топл.газа

Топливный газ сред.давл.От системы топл.газа

Приёмныйколлектор

С 1

АВО-1 АВО-2С 2 С3

Жидкость в закрытуюдренажную систему

Выходнойколлектор

Picture 8. Configuration of Booster Compressor Station

Receiving collector

Gas from manifold

Air cooler

Outlet collector

Liquid to closed drainage system

Medium pressure fuel gas from fuel gas system

Medium pressure fuel gas from fuel gas system


101. The basic process flow chart of gas dehydration and mercaptan removal is shown in Picture 10. This plant consists of two main sections: molecular sieve section where water and mercaptans are removed, and regeneration gas cleaning section. Desulfurized pre-cooled dry gas from gas molecular sieve filter comes to low-temperature separator. Saleable gas from low-temperature separator is sent to saleable gas compression system. Saleable gas compression is necessary for providing consistency with pressure at tie-in to pipeline.

102. Configuration of the sulfur plant is shown in Picture 11. One sulfur plant is designed for processing of acid gas generated from one third of all crude coming to GPP. In order to satisfy the technical conditions for sulfur removal to a level no lower than 99%, the design of Superklaus plant is recommended.

103. The sulfur plant is based on incomplete combustion of hydrogen sulfide (H2S), with three consequent stages of catalytic reactions in the Claus reactor and one stage of reaction in the Superclaus reactor. Degassed sulfur is pumped by sulfur pumps from storage department to liquid sulfur shipment facilities and granulation plant. In addition, liquid sulfur may be sent to sulfur storage facility by ROTOFORM method on Sandvic belts. Storage of granulated sulfur is provided at warehouse.

104. Safe removal of hydrocarbons and liquid flows received from process and auxiliary systems in the process of normal operation of the plant as well as upon deviations of process flow, breakdowns, startup and shutdown of plant, will be provided at the factory in Kandym by means of in-factory system of combustion in flare and liquid waste drainage system. The factory flare facility includes high pressure flare and low pressure acid gas flare. All flares are above ground.

105. Saleable gas dried and stripped at Kandym GPP will be transported via the gas pipeline to the main gas pipeline system of Transgaz. The route of saleable gas main pipeline will cross a number of motor roads, water discharge collector, Chimkent-Charjow oil pipeline (not operating), fiber-optic communication cable. For periodical cleaning of inner hollow of gas pipeline during operation and passing of inner flaw detector, provision will be made for pig receiver valve in modular-packaged construction. Laying of gas pipeline is planned underground at a depth at least 1.0 m to top of pipe or ballasting device. Passive protection of the gas pipeline against soil corrosion will be provided by anti-corrosion coating. Protection of pipes against underground corrosion will be provided by electrochemical protection system with continuous cathodic polarization of pipe surface.

106. The project power distribution system will receive and distribute power supply at least from two independent sources. The power generation system located within the KGPP facility is deemed as one of such independent sources. The power network existing in the region may be deemed as the second independent source.

107. The intra-factory power generation system consists of two or three generators, each designed for the installed load power with service factor and automatic change-over.

108. Provision will be made for the common water supply and drainage system of field and GPP development facilities, including: water supply sources, water supply mains and water treatment, storage and supply facilities; drainage networks and waste water collection, pumping and treatment facilities; treated waste water recycling facilities.


Picture 9. Schematic Diagram of Gas Processing Plant

Camp Drinking water accumulating tanks

Drinking water supply 2nd raise pumping station

Water treatment

Process water supply 1st raise pumping station

Sewage treatment plant

Main water discharge canal

Drinking water supply 1st raise pumping station


От установкиочистки откислого газа

В системухладагента

Из системыхладагента

В системупластовойводыВ сепараторк онденсата В систему

пластовойводы

В дренажную системунефтеводяных стоков

На факельноехозяйство

От блока закачкиантивспенивателя

В установкусероочистки

На факельноехозяйство

Азот

От системытопливного газа

В установкусероочистки

Закачкаантивспенивателя

В дренажную системунефтеводяных стоков

Азот

Свежийрастворитель

Picture 10. Process Flow Chart of Gas Drying and Cleaning

From acid gas removal unit

To coolant system

from coolant system

to formation water system

To condensate separator

To fuel gas system

To low-temperature separator

From fuel gas system

To flare facility

to formation water system

to oil and water effluent drainage system

From anti-foaming agent injection unit

To sulphur removal facility

to oil and water effluent drainage system

To sulfur removal facility

anti-foaming agent injection

To flare facility nitrogen

nitrogen

Fresh solvent


Picture 11. Sulfur Production Flowchart

From AGR evaporating tank

From evaporating tank of selexol

From selexol regenerator

From AGR regenerator

To formation water system

steam

To high pressure steam collector

From 1st/2nd sulphur condensers

To 4th heater To sulphur pit

To high pres. vapour. condensate collector

To high pressure steam collector

To Claus blower


from high pres. vapour. condensate collector

from low pres. vapour. condensate collector From line

of water feeding to boiler


To sulphur bunker

from sulphur bunker

From line of water feeding to boiler

To thermo oxidizer


From heat-recovery boiler

From 3rd/4th sulphur condensers

from high pressure steam collector

To low pressure steam collector



To blowoff collector


To low pressure steam collector

from low pressure steam collector



To sulphur pit To blowoff collector

To sulphur bunker

from high pressure steam collector

to high pressure steam collector


From fuel gas system From line 2

From line 3

From fuel gas system

to low pressure steam collector

To blowoff collector


To sulphur loading

From line 2 From line 3

steam

from Claus blower

steam

To sulphur bunker


109. All domestic waste water will be treated at the sewage treatment facilities. Domestic effluents after full biological treatment and disinfection will be reused. Treated industrial waste water and chemically contaminated effluents (formation water, effluents of boiler-house and blowoff water of circulation system, etc.) will be disposed by injection1.

110. All the buildings will be equipped with supply and extract ventilation with mechanical and natural draft.

111. For transport, inter-site motor road to sites of SP-1, 2, 3, 4, 5, to water intake facilities and approach roads to GPP will be constructed. Provision will also be made for reconstruction of local motor roads.

112. The site will be connected to the nearest operating railway line located about 40 km away. Track gage and throughput capacity of railway branch will meet state railway standards. Railway branch approaching to the site will have tracks for loading of sulfur, condensate and dry cargo, as well as for unloading of automobile diesel fuel, aircraft fuel and dry cargo.

113. The existing personnel will be employed as main production personnel. Labor will be sourced from the nearby towns of Bukhara Province and workers will be housed in shift camps inside the Contract Area and away from the nearby settlements. Transport of workers (one daily team of two shifts) will be by motor cars provided by the Operator.

114. Provision will be made for residence, canteens, workshops and fuel storage for construction workers. These facilities may be deemed as temporary. Nevertheless, it is very important to start planning for these facilities at early stage of the Project. Inability to provide meals and residence for construction workers can adversely impact the construction completion time due to limitations of the quantity of workers which can be accommodated in the camp.

115. Currently, provision is made for design solutions for construction of camp of the facilities construction supervision service – Picture 12. The current well drilling contractor’s temporary working camp is designed for accommodation of 107 persons with all social and sanitary facilities. During the peak of construction (2014-2019), approximately 650 LUOC staff and 4000 civil works contractors workers per shift are expected. While the exact numbers cannot be determined at this stage, contractors are expected to follow existing national regulatory documents taking into account comfortable and convenient conditions for workers’ accommodation and living conditions. Contractors’ workers camps are also expected to accommodate LUOC staff in charge of construction supervision and are therefore expected to provide accommodations that are compliant with LUOC standards for shift personnel accommodations. All shift camps will comply with the LUOC Internal Regulations No. 300 on Camp Habitation issued in 2009.

116. During operations, approximately 2000 (1000 per shift) LUOC permanent staff are expected to work on rotation basis and will need accommodations at the shift camp. Space-planning and structural solutions for buildings and facilities of shift camp on the basis of plot plan in compliance with existing regulatory documents taking into account comfortable and convenient conditions for shift personnel accommodation and living conditions. Provision will be made for administrative building, hostels, canteen, first aid point, gym hall, laundry, material storage and distribution warehouses, car parking, water treatment station, drainage pump station, water supply facilities, communication container, biological treatment station, evaporation ponds and sludge drying beds, solid waste collection ground. Provision will be made for heating and air conditioning of residential and working rooms. Storage-type electric water heaters will be used for domestic hot water supply. Communication system will include fiber-optic cables, emergency and operational public address system, satellite and terrestrial television, corporate data transmission network.

117. For construction water, water supply will be sourced from 4 production water wells. The space between wells will be from 50 to 100 m and depth will be 474.5 to 487 m. An 11 km long motor road as well as power transmission line will be laid to the well site.

1 The main characteristics and conditions for industrial wastewater injection to water bearing strata will be determined during the future project design stage and after preparation of technical and economic feasibility report.


Picture 12. Arrangement Plan of Camp and Waterworks

List of Buildings and Structures 1. Security checkpoint 1 2. Administration building (module type) 3. Engineering personnel hostel 84 persons 4. Engineering personnel hostel 18 persons 5. VIP house for 2 persons 5’. VIP house for 1 person 6. Canteen for 30 seats with VIP hall for 10 seats 7. First aid point 8. Gym hall 9. Laundry 10. Warehouses 11. Car parts warehouse 12. Ground 13. Warehouse manager 14. Car trestle 15. Shed for 10 cars 16. Parking for 10 cars 17. Security checkpoint 2 18. Transformer Substation 10/0.4 kV 19. Diesel generator 20. Diesel fuel tank 21. Toilet for 4 persons 22. Solid waste ground 23. Sewage pump station 24. Water treatment station 25a. Fire water tank 25b. Drinking water tank 25c. Fire pump station 26. Evaporating pond 27. Communication house 28. Communication mast 29. Biological treatment station 30. Sludge bed 31. Evaporating pond


DATA ACQUISITION BY STUDYING DOCUMENTS

REGISTRATION OF EVENTS OF

INCOMPLIANCE WITH AUDIT CRITERIA

ADDITIONAL INFORMATION

THROUGH OBSERVATIONS

OBSERVATION RESULTS

APPROVAL BY STATE ENVIRONMENTAL

COMMITTEE OF THE RUz

CONCLUSIONS AND RECOMMENDATIONS

EXECUTION CONTROL

GENERAL REPORT

ENVIRONMENTALAUDIT

DATA ACQUISITION BY STUDYING SURVEY/

INTERVIEW

4. Description of environmental conditions

118. The baseline environmental and social conditions of the KGF have been determined during initial Environmental Audit by authorized designated laboratories, certified according with legislation of the RUz (laboratories of the State Committee for Nature Protection, Ministry of Health, Academy of Sciences), as well as by using data of State Institutes of Bukhara Region. The Environmental Audit Scheme is set out in Picture 13. The Observation network layout within the framework of Environmental Audit Section of the Kandym Group of Fields and Environmental Audit Methodology used in the determination of the different environmental baseline parameters such as air quality, surface and groundwater quality, soil and subsoil condition, background radiation and ecotoxicological analysis are included in Attachment №3.1 and Attachment №3.2.

119. Environmental components and social aspects, including atmosphere air, surface, ground and underground waters, bottom sediments, soil and subsoil, flora and fauna, radiation environment, as well as socio-demographic aspects of the population in this Contract Area have been researched and sampled.

120. The results of the performed works on Environmental Audit have passed State Environmental Expertise (Conclusion No18/126з dated 21.04.05), approved and recommended for use as specification of initial conditions of Environment on the KGF (Attachment №5). These information also have been published (Vecherniy Tashkkent newspaper, No 36 dated 22 February 2005. and Pravda Vostoka newspaper, No 71 dated 9 April 2005).

Picture 13. Environmental audit scheme


4.1 Topography and Geology 121. In terms of topography, the KGF area is a flat, low-hilled plain covered with thick aeolian formations, as illustrated in the satellite image below.

Picture 14. KGF satellite image

122. For physical and geographical regionalization of the RUz, the Contract Area is located in the Lower Zaravshan district.

123. The majority of the Contract Area is located in the Gazli physical and geographical region. This region covers the alluvial-deltal plain of the South-West Kyzyl Kum formed by the sediments of pra-Seravshan. This plain modified in places by eolation, has a slight slope from east and north east to west and south-west, towards the valley of Amudarya River. There are many recesses of soil blowing, massifs of aeolian sands, outliers of alluvium and low residual/island mountains formed by pre-Quaternary deposits.

124. Sediments of pra-Zeravshan forming the alluvial-depositional plain of ancient delta of Zeravshan are separated as lower-Quaternary. The watercourse of Taylir within the Karakul oasis is used as irrigation canal.

125. The Bukhara-Karakul physio-geographical region takes the central position in the Lower Zaravshan physico-geographical district. The majority of the area of the region is the surface of Bukhara and Karakul deltas constituted by 2nd terrace above flood-plain of Zeravshan. The flood


plain and 1st terrace above flood-plain have very limited development. It is traces along the current watercourse of Zeravshan in form of separate sections.

126. Composition of the today’s valley of Zeravshan within the district includes the flood plain, 1st and 2nd terraces above flood-plain. Gradient from north-east towards south-west changes within the absolute elevations from 300 m at Navoi to 200-150 at Karakul.

127. Great areas in lower Zeravshan river are taken by aeolian plains. Here, alluvial sediments have been subjected to soil blowing and almost no signs of ancient water are noticeable. Within the area in question, aeolian plains include sands of Kemirekkum of north-west boundary of the Bukhara oasis.

Picture 15. Typical Vegetation of the Contract Area

128. Relief of the Contract Area is flat-plain with small area of hills in south-west part. The majority of the Contract Area is taken by sand of various forms (Pictures 15 and 16) (smooth, barkhan, hilly sands, etc.). Barkhan sands (Kemirekkum) take significant portion of the area.

129. Height of barkhans is up to 8 m, south slopes are steep (up to 45°), northern slopes are less sloping (20°). The northern part of the area is taken by hillocky and ridgy sands fixed by grass planting, saksaul and bushed. Relative height of ridges and hillocks

is up to 8 m, distance between them is 10 to 20 m. Thickness of sand cover reaches 6 m. The areas of semidesert prairie have flat surface covered semi-bush vegetation to the north, and woody planting to the south-east. Small areas of alkali soils exist in the area. In dry season, shell is formed on their surface, which freely takes the weight of human, and in rainy season they soak and become difficult to pass. Movement of motor vehicles outside roads on sands is complicated, in wet weather passability improves to 10 – 15 km/h (because sands become more solid and less movable). In habitable area, movement of motor vehicles is complicated by strongly developed irrigation network.

130. Kemirekkum sands are separated as sandhill ranges. Barkhan sands of the boundary of the Bukhara oasis are divided into two morphologic variations of sands – single sandhills and sandhill ranges. Small ridgy-hillocky sands are prevailing everywhere. These are separate ridges extended to 100m – 200m, and somewhere to 300m, their width is 15.5m to 20m, height 0.5m to 3m, spacing between ridges is 10m to 40m, direction of ridges is close to meridional. Sand hillocks with height of 0.5m to 5m are located in inter-ridge recesses. Separate sandhills mainly exist on alkali soils and takyrs (claypan).

131. Actual elevations of the area vary from +182m to +197m above sea level.

4.2 Desertification 132. According a report of the Main Administration on Hydrometeorology2 deserts and semi-deserts occupy eighty percent of the territory of the Republic of Uzbekistan. Control of desertification and adaptation to droughts are vital to ensuring sustainable development. The RUz

2 Main Administration on Hydrometeorology (Glavgidromet) at the Cabinet of Ministers of the Republic

of Uzbekistan; “National Report of the Republic of Uzbekistan on the Implementation to Combat Desertification (CCD)”; Tashkent April 2002


was an active participant in the design and implementation of the UN Convention to Combat Desertification and Drought. The RUz has ratified the Convention.

133. Intensive agricultural land usage leads to the degradation of irrigated lands. Secondary salinization affects more than 50 percent of irrigated area. Cattle pasture and related erosion processes together with other anthropogenic impacts have resulted in severe rangeland degradation (losses in forage capacity). Drifting sands occupy about one million hectares, of which 200,000 have emerged in recent times along the boundaries of irrigated lands, resulting in an intensification of the desertification processes.

134. Beginning from the past quarter of the 20-century the degradation of one of the world’s major land-locked water bodies, the Aral Sea, has taken place, the level of which has dropped by 17 meters and its water surface area shrunk by more than half. A new sand-salt desert with an area of more than 30,000 square kilometers has emerged on the dried-out Aral Sea bed. Changes of climate, landscape, fauna and flora as well as intensification of salt and dust transfer in the Aral Sea littoral and adjacent territory intensify the desertification processes. The deterioration of environmental situation is having a both direct and indirect negative impact on the quantity of life and the health of 35 million people living in the Aral Sea basin.

Picture 16. Desert sands

135. The area of the KGF is not currently being used for agriculture or pasture. The principal desertification effects in the Contract Area consist of the prevalence of shifting or drifting sands where vegetation is insufficient to hold the sands in place. There are no surface water features within the KGF reserve and no history of irrigation in the Contract Area.

There is no nature protected areas inside the KGF Contract Area. The nearest area of potential ecological concern is Karakul

reserve. Minimum distance from Karakul Reserve to Kandym GPP is about 10 km (2.5km away from the Contract Area boundary). Research on the control of shifting sands is underway in the nearby Karakul Reserve. The Karakul reserve was established by State Committee for Nature Protection of the RUz in 1971 to study the fixation of mobile sand dunes to protect irrigation systems from sand encroachment. An additional purpose was to restore the fauna and flora of the southern Kyzylkum desert, especially the Goitered Gazelle and migratory waterfowl.3 Taking into account that Karakul Reserve is located outside Kandym group of fields, and all routes (automobile road and railway) will go outside its boundaries (detour) there is significantly low possibility of having cumulative impact on Karakul Reserve. The anti-desertification program which is already in place contributes to this effort of sand fixation. Awareness enhancement training among workers over the years will also be conducted, to share the work of nature conservation measures and assign personal responsibilities. Restoring vegetation and avoiding bird nesting areas and migratory routes (during Spring and Autumn), coupled with enhanced monitoring program and hunting/poaching control on staff, could be some of the main features of this Wildlife Conservation Program.

3 Rangelands of the Arid and Semi-Arid Zones in Uzbekistan. By G. Gintzburger, K. N. Toderich, B. K.

Mardonov and M. M. Mahmudov. Paris CIRAD and Aleppo, Syria: ICARDA (2003)


4.3 Climate 136. The climate of the Contract Area is continental. Average frequency of air calm (without any wind) for the Bukhara region is not high (occurs 8-9% of the time) which means that windy weather creates a good condition for dissipation of emissions from low fugitive emission sources. This factor indicates a good ability of atmosphere for self-purification and dispersion of any emissions.

137. An important weather factor affecting the level of atmosphere pollution is wind pattern formed by effect of atmospheric pressure and circulation processes and defining the direction and range of transfer of noxious impurities. This means that characteristic feature of atmosphere pollution in this area is increased content of dust of natural origin due to strong wind. The maximum wind frequencies and intensities have north and east direction, reaching the speed of 30 to 35 m/s.

138. Adverse weather conditions defining the development of soil blowing processes include increased wind speed, low humidity of atmosphere and low precipitation. Precipitations are rare, mainly in autumn and winter in form of rain and snow, maximum value of them does not exceed 100 to 140 mm per annum. Nevertheless, the precipitation defines the conditions of dissipation of pollutants and performs purifying function and reduces the level of atmospheric air pollution.

139. The most predisposed season to pollution is winter and spring period – the period of formation of fogs, when the process of accumulation of pollutants in atmosphere, with all other conditions being equal, is most intense. However, frequency of fogs is low in Bukhara Province and is at 0.8%. Foggy days fall in cold season of year – November-February. Summer and autumn months are less prone to air pollution.

140. Analysis of climatic and physio-geographic features of the region allows to make conclusion that on the area in question, the quality of air can worsen for a short period when strong winds blow, but in the other longer periods of time, the condition of atmosphere stays quite favorable.

141. By combination of the majority of climatic characteristics having the highest effect on dissipation of impurities, the area of location of the fields in the Karakul district belongs to the zone with moderate climatic atmospheric pollution potential (APP). The APP in various time of day can vary from 2.3 to 3.3. Average value of APP is 2.8 (moderate).

142. APP is used to define the aptitude of the area for pollution due to meteorological conditions. APP is understood as a combination of meteorological factors determining air pollution level, - frequency of low winds (0-1 m/s), ground inversions, stagnant atmospheric conditions and fogs. The following APPs are recognized as per classification established in RUz: low (less than 2.4), moderate (2.4-2.7), advanced (2.7-3.0), high (3.0-3.3) and very high (more than 3.3).

143. Thus, in most seasons, weather factors assist active dissipation of noxious substances emissions. The winter months can be slightly different with frequency of thermal inversions, fogs and windless weather.

4.4 Air Quality 144. The condition of atmosphere air on the KGF has been determined during initial Environmental Audit based on results of researches conducted on 19 sampling stations (see Table 6 and Attachment №3.1). In the course of researches conducted and laboratory tests the following results have been obtained:

Carbon monoxide content along the KGF does not exceed maximum permissible concentration (hereinafter MPC, witch are settled by legislation of RUz), maximum value – MPC 0.52;

MPC is used to show the comparison between the actual concentration of a particular substance and the standard (norm) established by the SCNP of the RUz for such substance, i.e. «MPC 2.0» means that concentration exceeds the established standard (norm) by two times.


High concentration of dust has been determined on the KGF: from MPC 1.1 up to MPC 4.32; high level of dust content in the atmosphere air is resulted from Kizilkum desert, in the territory of which the KGF is located, and is referred to natural sources of dust in the atmosphere air (Picture 17);

Methane content along entire territory of the KGF does not exceed safe reference levels of impact (SRLI), maximum permissible level – SRLI 0.04;

Hydrocarbons С2-С6 have not been determined in samples;

Phenol has not been determined among aromatic hydrocarbon; concentration of benzole does not exceed MPC; high level of concentration of xylol has been determined – up to MPC 3.26 and toluol up to MPC 2.04, it means that high level of concentrations of xylol and toluol are of natural origin (was detected in the area without industry, before Operator starts his Oil-and-Gas Operations);

Oxygen concentration in all tested samples is less compared to concentration of “dry air”

According to definitions accepted in the Republic of Uzbekistan term “dry air” (reference standard) means open air in the places quite distant from human intervention or from sections, where some abnormal natural procceses take place, with the following composition:

Component N2 O2 Ar CО2 H2 He Kr Content, % (volume) 78.084 20.946 0.93 0.04 0,01 0.0018 0.0001

Carbon dioxide has not been determined in samples;

Concentration of sulfur dioxide on the KGF does not exceed the specified MPC and only on two border zones (north-westwardly and south-eastwardly) is close to MPC level (maximum permissible level – MPC 0.93) (Picture 18);

Concentration of nitrogen dioxide exceeds the specified MPC on Akkum and Parsankul areas (partially), on the western area of the KGF, as well as areas, neighboring to north-eastern border of the KGF (from MPC 1.29 up to MPC 7.94) (Picture 19);

Elevated concentrations of nitrogen oxides can be observed on some sampling stations– from MPC 1.12 up to MPC 2.35 (Picture 19);

Concentration of ammonia in the atmosphere air of the KGF tends to decrease so far as to move northwardly and on some small areas northwardly from the KGF is within MPC, average concentration of ammonia as regards to MPC in general on the KGF exceeds the permissible level 3.7 times, maximum level –up to MPC 10.1 (Picture 20);

excess of MPC level of hydrogen disulfide concentration is determined on most of the sampling stations, maximum level – MPC 6.2 (Picture 21).

145. Thus, the KGF has its own peculiarities with regards to atmosphere air condition. High level of dust concentration, nitrogen oxides, hydrogen disulfide, ammonia, xylol, methyl benzene are of natural origin. Taking into account absence of operating industrial facilities in the territory under investigation it may be concluded that elevated concentration of given substances is caused by natural processes such as sand storms, organic decay of dead flora and fauna tissues taking place at high temperatures, water evaporation from open surface of canals flowing through KGF territory and collecting drainage effluents from the whole territory of Bukhara region.

146. It has been determined, that according to environment pollution level (combination of meteorological factors, determining the level of potential pollution of atmosphere from the sources on this area) KGF territory is located in the zone of medium potential of air pollution.


147. These are existing air conditions approved by SCNP of RUz and recommended for use as specification of initial conditions of environment on the KGF. The production activity shall be referenced to this air condition (if initial air conditions more then MPC).


Table 6. The condition of atmosphere air on the KGF determined during Environmental Audit

Sampling Station

CO2, %

N2, %

О2, %

PM/Dust content, mg/m3

CO, mg/ m3

CH4, mg/ m3

C2-С6, mg/ m3

SO2, mg/ m3

NO2, mg / m3

NO, mg/ m3

NH3, mg/ m3

H2S, mg/ Nm3

Phenol, mg / m3

Benzol, mg/ m3

Xylol, mg/ m3

Toluol, mg/ m3

1 - 78,06 20,86 0,701 1,8 0,801 - 0,117 0,11 0,205 0,355 - - - - - 3 - 78,51 20,73 - 2,4 1,286 - 0,025 0,157 0,001 0,484 0,004 - 0,013 0,031 0,031 6 - 78,06 20,59 0,542 1,6 1,814 - 0,119 0,183 0,057 0,638 - - - 0,078 - 9 - 78,06 20,47 - 1,4 1,814 - 0,463 0,055 - 0,462 0,016 - 0,011 0,068 -

11 - 78,06 20,33 - 2 1,707 - 0,058 0,169 - 0,643 0,004 - 0,012 0,037 - 13 - 78,06 20,86 2,161 1,5 0,971 - 0,062 - 0,026 0,747 - - - 0,093 - 15 - 78,06 20,86 0,652 1,3 1,792 - 0,055 0,022 - 0,581 0,028 - 0,349 - - 16 - 78,18 20,12 0,552 1,9 1,493 - 0,113 0,189 0,061 2,015 0,017 - - - - 18 - 78,06 20,12 0,432 2,5 1,729 - 0,317 0,124 - 0,213 0,029 - 0 - - 19 - 78,18 20,19 0,426 2,1 1,914 - 0,256 0,048 0,095 0,059 0,008 - 0,065 - - 21 - 78,24 20,33 - 2,6 2,021 - 0,089 0,057 0,09 1,623 0,033 - - - - 22 - 78,29 20,33 - 1,3 1,621 - 0,024 - - 0,601 0,005 - 0,775 0,568 1,227 23 - 78,4 20,72 0,978 1,4 1,642 - 0,447 0,057 - 1,081 0,01 - 0,988 0,293 0,639 24 - 78,06 20,86 - 1,3 0,714 - 0,034 0,242 0,035 0,036 0,003 - 0,552 0,341 0,81 25 - 78,06 20,12 1,357 1,2 1,793 - 0,018 0,152 0,048 0,179 0,004 - 0,446 0,207 - 26 - 78,51 20,86 1,604 1,4 1,328 - 0,013 0,042 - 0,742 0,049 - 0,105 0,652 0,875 27 - 78,18 20,6 1,077 1,4 1,752 - 0,245 0,027 0,07 1,272 - - - 0,122 - 28 - 78,24 20,59 - 1,7 1,904 - 0,012 0,083 0,288 0,887 - - 0,011 0,045 - 29 - 78,18 20,86 1,079 1,7 1,488 - 0,229 0,137 0,167 1,416 0,021 - 0,118 - -

Average value - 78,08 20,55 0,61 1,71 1,56 - 0,14 0,098 0,06 0,74 0,012 - 0,18 0,133 0,19 MPC - - - 0,5 5 50 - 0,5 0,085 0,6 0,2 0,008 0,01 1,5 0,2 0,6

World Bank 0.05 0.02 0.20 5mg/Nm3 Comment: «-» absence concentration.


3780 3785 3790 3795 3800 3805 3810 3815 3820 3825

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-0.100.10.20.30.40.50.60.70.80.911.11.21.31.41.51.61.71.81.9

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Picture 17. Diagram of distribution of dust in the air of KGF

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LM

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Picture 18. Diagram of distribution of sulphur dioxide in the air of KGF


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Picture 19. Diagram of distribution of nitrogen dioxide in the air of KGF

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-0.2

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Picture 20. Diagram of distribution of ammonia in the air of KGF


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0

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Picture 21. Diagram of distribution of hydrogen sulphide in the air of KGF

4.5 Surface and Ground waters 148. The river network of the Bukhara region appertains to internal blind drainage area of the Aral Sea and developed extremely irregularly. There are no rivers in the central desert areas, including KGF.

149. The largest river is Amudarya, which is 20-25 km south-westward from south border of the KGF, in the territory of Turkmenistan. In the area of Karakul from bed of Amudarya River numerous channels exist, with the remainder of water draining to lake systems through small channels - Taykir (Sunchur-Kul, Karanga-Kul and other lakes). All these small channels dry out about 25 km before reaching the Amudarya.

As it can be seen in Picture 3, two lakes are situated not far from Kandym group of fields – Dengizkul and Solenoye. Distance from designed Kandym GPP to lake Solenoye is about 10 km, and to lake Dengizkul it is more than 65 km.

150. The condition of surface and ground waters on the KGF has been determined based on results of researches conducted on 11 samples (during initial Environmental Audit). All of 11 samples of water have been selected, including 2 samples of water from the surface of basins (channels), 2 samples of ground water and 7 samples of potable water (see Attachment №3.1).

151. In surface water the contamination on weighted agents (up to MPC 3.4), general salinity (up to MPC 5.2), Biological Oxygen Demand (up to MPC 10.2), and Chemical Oxygen Demand (up to MPC 7.7) have been determined. Excess salinity composition (sulfates, chlorides, calcium, magnesium, potassium, sodium), heavy metals (zinc, iron), xylol and phenols have also been revealed. Oxygen concentration of water is within specified rates for fishery farms of I category. In the samples of water contents of ions of ammonium, nitrates, benzene, oil products and Synthetic Surfactants do not exceed the level of MPC. Phosphates, methanol, toluene and chromium have not been detected.


Table 7. Physical and chemical properties of surface water bodies at KGF

No Station number

Ingredients content

рН suspended matter, mg/l

dissolved oxygen, mgO/l

BOD5, mgО/l

COD, mgО/l

solid residues,

mg/l

overall salinity,

mg/l 1 4 7.55 38.5 8.8 30.7 118.0 4506.0 4388,0

2 27 7.31 51.0 10.5 9.8 38.0 5186.0 5148,0 Arithmetic mean value for the Contract Area

7.43 44.8 9.7 20.3 78.0 4,850 4,750

MPC value 6.5-8.5 15.0 at least 4 3.0 15.0 1,000.0 1,000.0

Table 8. Chemical properties of surface water bodies at KGF

No

Stat

ion

num

ber

Ingredients content, mg/l

amm

oniu

m io

ns

nitr

ates

nitr

ites

sulp

hate

s

chlo

rides

phos

phat

es

hydr

ocar

bona

tes

carb

onat

es

calc

ium

mag

nesi

um

pota

ssiu

m

sodi

um

1 4 0.18 10.5 0.4 1,755.0 1,347.1 - 366.1 - 380.8 243.2 564.0 389,2

2 27 - 5.0 0.1 1,774.0 2,605.5 - 427.1 - 320.6 285.8 922.8 636,8 Arithmetic mean value for the Contract Area

0,09 7.8 0.25 1765 1975 - 400 - 351 265 734 513

MPC value 0.5 40.0 0.08 100.0 300.0 0.3 - - 180.0 40.0 50.0 120.0

Table 9. Content of organic matter in surface water bodies at KGF

No Station number

Ingredients content, mg/l

benzol methanol petroleum products

Xylol toluol synthetic surfactants

phenol

1 4 0.002 - 0.01 1.23 - 0.02 0,0088 2 27 0.002 - 0.01 0.89 - 0.02 0,14

Arithmetic mean value for the Contract Area 0,002 - 0.01 1.06 - 0.02 0.074

MPC value 0,5 0.1 0.05 0.05 0.5 0.5 0.001

Table 10. Content of heavy metals in surface water bodies at KGF

No Station number Ingredients content, mg/l

copper chrome (VI) chrome (III) Iron zinc 1 4 0.0015 - - 0.055 0.054

2 27 - - - 0.049 0.043 Arithmetic mean value for the Contract Area 0.0008 - - 0.052 0.049

MPC value 0.001 0.001 - 0.05 0.01

152. In underground waters of the KGF the content of xylol has been determined as excess of the specified level of MPC. General salinity of water, biological oxygen demand in 5 days and chemical


demand in oxygen, copper, iron and zinc exceed the specified level of MPC as well. The concentration of the dissolved oxygen in the samples of underground waters is lower than the rate, specified for objects of I category, but higher than for objects of II category. The content of ion ammonia, nitrates, oil products, Synthetic Surfactants and benzole does not exceed the level of MPC. Phosphates, methanol, toluene and chromium have not been detected. The salinity of waters in blow-wells exceeds the level of MPC for potable use 7-10 times and varies from 5.1 to 10.3 g/l (this kind of water referred to as saltish water). The salinity of water is considerably lower in potable wells, even if they exceed the level of MPC 1.5 times as well.

153. In general, sanitary and bacteriological analysis of potable water has showed that potable water in wells does not comply with GOST 950:2000 “Requirements Potable water. Requirements to quality control”.

154. Some pollution by mercury and cadmium has been detected (both near MPC 2). High concentration of fluorides in water (MPC 1-1.5) has been determined almost in all wells. The content of arsenic, nickel, iron, cooper, zinc, benzene, oil products and nitrites doesn’t exceed the specified limits (MPC). Nitrates, barium, manganese, molybdenum, chrome and pesticides have not been detected.

155. These are water conditions approved by SCNP of RUz and recommended for use as specification of initial conditions of Environment on the KGF.

Table 11. Physical and chemical properties of ground water at KGF

No

Stat

ion

num

ber

Wat

er s

ampl

ing

dept

h, m

Ingredient content

рН

susp

ende

d m

atte

r, m

g/l

diss

olve

d ox

ygen

, mgO

/l

BO

D5,

mgО

/l

CO

D, m

gО/l

solid

re

sidu

es, m

g/l

hard

ness

, mg

eqiv

./l

over

all

salin

ity, m

g/l

1 3 4.5 6.99 63.0 10.7 11.95 46.0 4,658.0 40,0 4,612,0

2 28 2 7.35 51.5 0.6 17.68 68.0 3,376.0 25,0 3,308,0 Arithmetic mean value for the Contract Area 7.17 57.3 5.7 14.8 57.0 4,020 32.5 3,960

MPC value 6.5-8.5 15.0 at least 4 3.0 15.0 1,000.0 7.0 1,000.0

Table 12. Chemical properties of ground water at KGF

No

Stat

ion

num

ber

Ingredient content, mg/l

amm

oniu

m io

ns

nitr

ates

nitr

ites

sulp

hate

s

chlo

rides

phos

phat

es

hydr

ocar

bona

tes

carb

onat

es

calc

ium

mag

nesi

um

pota

ssiu

m

sodi

um

1 3 - 9.0 0.2 1,760.0 1,488.9 - 433.2 - 340.6 340.5 553.2 381,8

2 28 0.2 - 0.2 1,350.0 1,577.5 - 231.9 - 220.4 170.2 698.6 482,1 Arithmetic mean value for the Contract Area

0.1 4.5 0.2 1555 1530 - 280.5 - 280.5 255.4 625 432

MPC value 0.5 40.0 0.08 100.0 300.0 0.3 - - 180.0 40.0 50.0 120.0


Table 13. Content of organic matter in ground water at KGF

No Station number

Ingredient content, mg/l

benzol methanol petroleum products

xylol toluol synthetic surfactants

phenol

1 3 0.006 - 0.026 1.12 - 0.03 -

2 28 0.0043 - 0.018 1.39 - 0.029 - Arithmetic mean value for the Contract Area 0.0005 - 0.022 1.26 - 0.03 -

MPC value 0.5 0.1 0.05 0.05 0.5 0.5 0.001

Table 14. Content of heavy metals in ground water at KGF

No Station number Ingredient content, mg/l

copper chrome (VI) chrome (III) iron zinc 1 3 0.0013 - - 0.064 0,049 2 28 0.0019 - - 0.10 0,069

Arithmetic mean value for the Contract Area 0.0016 - - 0.08 0.06

MPC value 0.001 0.001 - 0.05 0.01


Tab

le 1

5.

Co

nte

nt

of

hea

vy m

eta

ls i

n d

rin

kin

g w

ater

of

KG

F, m

g/l

Zinc

0.05

5

0.04

2

0.02

5

0.06

8

0.06

7

0.05

7

0.06

5

0.05

4

3.0

Iron

0.07

3

0.07

3

0.04

0.09

3

0.04

4

0.11

0

0.04

6

0.06

8

0.3

Chrome (VI) - - - - - - - -

0.05

Lead

0.01

6

0.00

2

0.00

7

0.02

0.00

6

0.00

3

0.00

8

0.00

9

0.03

Mercury - - - -

0.00

7

- -

0.00

1

0.00

05

Nickel

0.05

0.05

5

0.03

5

0.04

0.05

0.02

0.02

5

0.04

0.1

Arsenic

0.00

75

- -

0.01

0.00

25

0.00

35

0.00

5

0.00

4

0.05

Molybdenum - - - - - - - -

0.25

Copper

0.00

24

0.00

03

0.00

11

0.00

73

0.00

055

0.00

1

0.00

09

0.00

2

1.0

Manganese - - - - - - - - 0.1

Cadmium

0.00

1

0.00

1

0.00

1

0.00

01

-

0.00

1

0.00

2

0.00

1

0.00

1

Boron - - - - - - - - 0.5

Aluminium

0.17

9

-

0.17

0

- - - -

0.05

0.2

Station number 2 7 11

18

19

24

30

Arit

hmet

ic

mea

n va

lue

for t

he p

lot

MPC

val

ue

No 1 2 3 4 5 6 7


Table 16. Content of organic matter in drinking water at KGF

No Station number

Ingredient content

benzol, mg/l

petroleum products,

mg/l

synthetic surfactant

s, mg/l

phenol, mg/l

pesticides, microgram/l alpha-

hexachlorocyclohexane

gamma-hexachlorocyclohexane

dichlorodiphenyldichloroethylene

dichlorodiphenyltrichloroethane

1 2 0.004 0.015 - - - - - -

2 7 0.003 0.011 - - - - - -

3 11 0.009 0.043 - - - - - -

4 18 0.004 0.018 - - - - - -

5 19 0.005 0.021 - - - - - -

6 24 0.002 0.010 - - - - - -

7 30 0.003 0.011 - - - - - - Arithmetic mean value for the Contract Area 0.004 0.018 - - - - - -

MPC value 0.01 0.1 0.5 0.02 0.002 0.012

Table 17. General sanitary and bacteriological properties of drinking water at KGF

No Station number Bacteriological analysis

Compliance with water quality standards total bacterial

count coli index coli titer

1 2 12-16 10 105 incompliant

2 7 no increase 3 333 compliant

3 11 6-10 9 111 incompliant





MPN= most probable number 100 3 333 -

4.6 Geology, Soil and Subsoil 156. Kandym’s geology includes the Mesozoic/Cainozoic complex occurring at the eroded Palaeozoic bed. By lithology and sediment formation conditions, the Jurassic sediments include three formations: terrigenous, carbonate and salt/anhydrite.

157. Middle and Upper Jurassic terrigenous sediments occur throughout Kandym field. These sediments include argillites with loamy, siltsone, sandstone and gravelite interlayers and limestones occurring in the upper part.

158. The Middle Callovian-Oxford - Hissar suite thick carbonate formation includes two members. The lower member mainly include tight loamy rarely porous limestones interlayered with loams and siltstones. These sediments are classified as XVI horizon with thickness of 44-64 m. The upper part of the carbonate formation include XV-3, XV-2 and XV-1 horizons. XV-4 horizon includes dolomitic limestones with anhydrite and loam interlayers.The thickness varies from 99 to 128 m. The thickness of XV-2 horizon that includes dolomitic limestones with small anhydrite and dolomite interlayers varies from 71 to 87 m. That of XV-1 horizon including grey dolomitic and silty limestones with thin dolomite, anhydrite, sandstone and siltstone interlayers is 28-35 m. The total thickness of carbonate formation varies from 297 to 327 m across the field area.

159. The Kimmeridgian/Tithonian Sediments - Gaurdak suite includes four layers. The rock member (up to 7 m) including interstratified sandstones and loams occurs at the toe. The upper


member i.e. an overlapped Kimmeridgian/Tithonian member includes loams and sandstones interstratified with anhydrites, marls and dolomites. Its thickness varies from 6 to 23 m. The total thickness of Kimmeridgian/Tithonian sediments varies from 108 to 40 m decreasing north-westerly.

160. Lower Cretacious Sediments - Neocomian Superstage include terrigenous sediments i.e. interstratified sandstones, loams and siltstones. The Neocomian superstage include XIV-1, XIV-2 and XIII porous horizons. The total thickness of the Neocomian sediments varies from 266 to 292 m.

161. Lower Cretacious - Aptian Stage sediments include sandstones interstratified with loams and siltstones. The Aptian sediments includes the greatest part of XII horizon (except for the upper rock member of 6-13 m). The thickness of Aptian sediments varies from 88 to 102 m.

162. Lower Cretacious - Albian stage's sediments including mainly loams with grey sandstones and siltstones includes XV horizon of 110-125 m. The total thickness of the Albian sediments varies from 290 to 312 m.

163. The Upper Cretaceous Cenomanian Stage sediments include sandstones and siltstones interstratified with dark grey marls. The Cenomanian sediments include X and IX horizons. The thickness of Cenomanian sediments varies from 270 to 292 m.

164. Upper Turonian Stage sediments originally includes sandstone and siltstone member which are the upper part member of IX horizon. Generally, the Turonian section includes loams. The upper part of Turonian sediments includes VIII horizon composed of sandstones with loam interlayers. The total thickness increases from 238 to 262 m from the southeast to the north-west of the field.

165. The Upper Cretacious Cenonian Stage sediments include interstratified loams, siltstones and sandstones with individual interlayers of shell deposits. The thickness of these sediments is 410-445 m.

166. The Palaeogene System Palaeocene Stage Bukhara Layer sediments occur on the Cenonian sediments with a stratigraphical break. They include highly calcareous sandstone interstratified with limestones and gypsum. The thickness is 40-50 m.

167. Eocene sediments include loams with thin marl interlayers occurring in the upper and middle parts within Kandym field. The thickness of Suzak layers varies from 35 to 43 m.

168. Alay layers. include a marl mergel with pyrite accumulations. The thickness is 26-35 m.

169. Upper Eocene sediments include a continuous loam formations with individual sandstone and siltstone interlayers. The thickness is 147-230 m.

170. Neogene sediments occur at eroded Upper Eocene loams. They include alternating sandstones, loams and siltstones. The thickness is 40-162 m.

171. Lastly, Quaternary Sediments include Aeolian sands and rarely alluvial formations. The thickness is 3-15 m.

172. The KGF is represented by one type of soil – desert sandy soil, which has primitive structure. The layer of soil mantle does not exceed 10-20 cm. The structure and properties of such type of soil are determined by peculiarities of soil formation, progressing in the conditions of strong arid climate and under the affect of ephemeral plants. Friable structure of sands and exposure to their transmission specifies slight development of the soil profile. Constant renewals of the soil profile on top by sand understratum specify relative age of the soil.

173. Water permeability affects the formation of the sand soil, enabling complete absorption of rainfall and deep soaking of moisture. At temperature variation and intensive air change the thermal condensation of vaporous moisture from atmosphere occurs.

174. Study of soil and subsoil content on the KGF has been performed on 21 sampling stations (during initial Environmental Audit, see Attachment №3.1). Selection of samples has been performed from different levels (0.3, 1 and 6 m). As by the time of Environmental Audit conducted in the territory of Kandym field there had already been 24 wells drilled by Uzbekneftegaz (the Republic


of Uzbekistan) in 1967 – 1978 yy. (so called “historical wells”) territory adjacent to the wells was also surveyed. For comparison of pollution grade of the environment as a result of gas wells drilling, performed before on the KGF, directly close to “historical wells”, the surface soil has been selected and submitted for laboratory tests. It was doing for identification the historical soil and subsoil pollution.

175. Later Operator conducted re-entry and testing of 19 “historical wells” of Kandym field (160, 244, 245, 408, 216, 243, 320, 237, 217, 321, 242, 246, 253, 312, 250, 251, 324, 329, 30), after that they were shut down again and transferred to Uzbekneftegaz. At four wells (255, 256, 257, 215) wellhead equipment was entirely absent (removed), so that any refurbishment of these wells is impossible. Well №259 was abandoned by Uzbekneftegaz due to technical reasons. Some of these historical wells will be decommissioned in the next 5 to 6 years and will be subject to separate EEA (Ecological Effect Assessment) as required by the law.

176. The results of the studies have showed that soil and subsoil on the KGF:

- as per its mechanical composition (which refers to the type of light grain composition): sands, sand clay, light argil sand ground; in some cases layers of medium and heavy sand clay may be found; in fractional composition of soil fine particles prevail (0.1-0.05 mm) (Tables 18, 19 and 25);

- subject to salinization: as per chemical composition they are essentially chloride-sulfate, very seldom sulfate-chloride (Table 20 and Table 21);

- very poor in containing of organic matters, nitrogen, phosphorus and potassium;

- mainly, non-gypsum.

177. The determined concentration of oil products and phenol does not exceed background level settled by SCNP of RUz for Bukhara Region – 0.5 mg/kg (for oil products) and 0.005 mg/kg (for phenol).

178. Background level is established based on the result of several years observations by SCNP of RUz in area without any activities.

179. The exceptions are samples of soil close to suspended oil wells (“historical wells”) No. 215, 320, 243, 160, 246, 251, 257 and 256, where multiple (up to 18 times) excess of background level of oil product concentration has been determined (see Attachment №3.1 and Picture 25).

180. The concentration of organochlorine pesticides (hexachlorane, DDT [dichlorodiphenyltrichloroethane and its metabolites]) has been determined in a very low level (refer to Tables 26 and 27).

181. The concentration of cadmium and manganese does not exceed maximum permissible concentration (according to accepted European standards). The excess of lead concentration (as per European standards) has been determined only at one plant (refer to Tables 24 and 25) .

182. The concentration in soil (subsoil) of copper and iron is on background level (refer to Pictures 27 and 28 respectively).

183. Soils (ground) from the Contract Area are very poor in terms of humus, nitrogen, phosphorus and potassium content. With respect to gypsum content, the soils (ground) are mostly not gypsum-saturated.

Table 18. Grain-size composition of soils at KGF

No

Stat

ion

num

ber

Sam

plin

g de

pth,

m

Percent of fractions of the following sizes, mm

Alp

hitit

e, %

Visual Description

> 0.

25

0.25

-0.1

0.1-

0.05

0.05

-0.0

1

0.01

-0.0

05

0.00

5-0.

001

< 0.

001


1 3 0.3 3.6 0.9 25.7 31.6 10.4 18.0 9.8 38.2 medium-heavy sandy clay

2 5 0.3 0.3 0.1 98.1 0.5 0.4 0.2 0.4 1.0 sand

3 6 0.3 0.1 0.4 97.9 0.5 0.5 0.5 0.1 1.1 sand

4 9 0.3 1.0 0.5 70.7 12.2 4.4 5.4 5.8 15.6 sandy loam

5 11 0.3 0.2 0.4 97.2 1.1 0.5 0.2 0.4 1.1 sand

6 13 0.3 0.4 2.5 94.7 1.2 0.2 0.3 0.7 1.3 sand

7 14 0.3 0.7 1.0 31.8 40.6 5.1 10.3 10.5 25.9 sandy loam

8 16 0.3 0.7 1.0 95.7 1.4 0.6 0.4 0.2 1.2 sand

9 17 0.3 0.6 0.4 58.2 24.2 6.2 6.2 4.2 16.6 sandy loam

10 18 0.3 0.3 0.9 97.4 0.5 0.2 0.3 0.4 0.9 sand

11 19 0.3 0.5 1.5 95.0 1.3 0.5 0.3 0.9 1.7 sand

12 20 0.3 1.3 1.3 95.6 0.4 0.3 0.4 0.7 1.4 sand

13 21 0.3 1.3 0.7 83.4 7.4 1.1 2.8 3.3 7.2 sand

14 22 0.3 0.7 0.5 83.1 6.6 1.6 4.4 3.1 9.1 sand

15 23 0.3 0.3 0.3 94.8 1.4 0.2 0.6 2.4 3.2 sand

16 24 0.3 0.3 0.2 97.1 1.0 0.2 0.4 0.8 1.4 sand

17 25 0.3 1.5 1.6 90.7 2.4 0.6 0.6 2.6 3.8 sand

18 26 0.3 1.0 1.1 92.8 1.4 0.8 0.7 2.2 3.7 sand

19 29 0.3 4.2 1.0 76.6 11.4 1.2 2.0 3.6 6.8 sand 20 30 0.3 0.2 0.2 92.6 1.8 1.6 1.2 2.4 5.2 sand 21 31 0.3 3.0 1.2 86.9 3.9 1.3 1.5 2.2 5.0 sand

Table 19. Grain-size composition of the ground at KGF

No

Stat

ion

num

ber

Sam

plin

g de

pth,

m Percent of fractions of the following sizes, mm

Alp

hitit

e, %

Visual Description

> 0.

25

0.25

-0.1

0.1-

0.05

0.05

-0.0

1

0.01

-0.0

05

0.00

5-0.

001

< 0.

001

1 3

1 1.8 0.6 15.8 33.0 15.2 16.4 17.2 48.8 heavy sandy clay

2 6 5.2 6.0 82.6 1.8 1.6 0.6 2.2 4.4 sand

3 5 1 0.9 4.5 53.9 24.7 5.6 6.0 4.4 16.0 sand

4 6 1 0.4 3.0 94.0 0.3 0.2 1.8 0.3 2.3 sand

5 9 6 0.2 0.6 92.4 2.6 1.2 0.8 2.2 4.2 sand

6 11

1 0.3 0.5 97.9 0.3 0.4 0.2 0.4 1.0 sand

7 6 0.7 1.0 94.3 0.9 1.0 0.5 1.6 3.1 sand

8 13 1 0.4 1.1 90.9 5.7 0.9 0.6 0.4 1.9 sand

9 14 1 0.3 0.4 96.7 1.6 0.5 0.2 0.3 1.0 light sandy clay

10 16 1 0.5 0.5 97.8 1.3 0.2 0.3 0.4 0.9 sand

11 17 1 0.4 0.8 77.7 15.4 2.1 4.1 2.2 5.7 sand

12 18 1 0.2 0.3 98.2 0.3 0.3 0.3 0.4 1.0 sand

13 19 1 2.0 4.2 91.9 0.6 0.5 0.2 0.6 1.3 sand

14 20 1 0.2 0.4 97.6 0.3 0.3 0.3 0.9 1.5 sand

15 21 1 2.9 1.3 88.6 3.9 0.5 1.1 1.7 3.3 sand

16 22 1 1.2 0.5 85.3 4.7 1.5 3.1 3.7 8.3 sand

17 23 1 1.2 0.9 84.1 7.2 1.2 1.0 4.4 6.6 sand

18 24 1 9.2 2.2 81.8 1.3 0.9 2.4 2.2 5.5 sand


No

Stat

ion

num

ber

Sam

plin

g de

pth,

m Percent of fractions of the following sizes, mm

Alp

hitit

e, %

Visual Description

> 0.

25

0.25

-0.1

0.1-

0.05

0.05

-0.0

1

0.01

-0.0

05

0.00

5-0.

001

< 0.

001

19 25 1 6.1 2.9 85.4 2.4 0.4 0.6 2.2 3.2 sand

20 26 1 1.3 1.3 90.5 2.5 0.5 2.1 1.8 4.4 sand

21 29 1 1.6 0.7 88.5 3.2 1.8 1.6 2.6 6.0 sand

22 30 1 1.8 0.5 85.3 9.0 0.6 1.0 1.8 3.4 sand

23 31 1 1.0 0.8 87.9 5.0 1.7 1.8 1.8 5.3 sand

Table 20. Content of water-soluble salts in soils at KGF

No

Stat

ion

num

ber

Sam

plin

g de

pth,

m

Solid

re

sidu

es, %

Component content, mg-equiv./kg of dry weight

Ove

rall

alka

linity

in

НСО

3

Cl SO4 Ca Mg Na K

Sum

of

ions

and

ca

tions

1 3 0.3 1.618 0.139 12.239 8.299 15.968 4.438 0.271 0.230 41.513 2 5 0.3 0.092 0.213 0.553 0.603 0.549 0.493 0.327 0.026 2.658 3 6 0.3 0.162 0.259 1.100 0.666 0.599 0.493 1.933 1.794 4.715 4 8 -* 1.134 0.7 7.106 5.538 2.994 1.973 8.377 5.171 31.509 5 9 0.3 1.512 0.107 9.391 5.533 11.078 3.946 0.007 0.051 30.059

6 11 0.3 1.364 0.115 12.323 4.659 12.275 4.735 0.087 0.077 34.214

7 13 0.3 0.119 0.213 1.015 0.645 0.898 0.789 0.186 0.154 3.794

8 14 0.3 0.246 0.139 0.790 1.872 0.898 0.493 1.410 1.229 6.762

9 15 -* 0.542 0.648 0.790 4.118 1.497 1.973 2.086 1.536 12.324

10 16 0.3 0.188 0.230 0.310 1.560 0.798 0.411 0.891 0.795 4.880

11 17 0.3 0.572 0.180 5.358 1.331 0.499 0.493 5.877 3.814 17.462

12 18 0.3 0.074 0.180 0.310 0.343 0.200 0.296 0.337 0.486 2.062 13 19 0.3 0.084 0.180 0.079 0.764 0.499 0.493 0.031 0.051 2.007 14 20 0.3 0.094 0.230 0.169 0.458 0.429 0.198 0.230 0.435 2.034 15 21 0.3 0.138 0.328 0.395 0.790 0.049 0.592 0.872 0.717 3.579

16 22 0.3 0.675 0.098 6.232 2.891 3.194 1.677 4.350 3.072 21.465

17 23 0.3 0.274 0.246 0.479 3.104 1.297 2.269 0.263 0.384 7.919

18 24 0.3 0.342 0.394 2.369 1.165 0.399 0.296 3.233 2.202 9.861

19 25 0.3 0.298 0.295 0.479 3.162 1.148 2.170 0.618 0.563 8.288

20 26 0.3 0.098 0.262 0.226 0.624 0.049 0.690 0.273 0.256 2.349

21 29 0.3 1.724 0.107 11.323 7.509 16.866 1.874 0.199 0.256 38.081

22 30 0.3 1.034 0.107 3.158 10.400 12.076 1.282 0.307 0.333 27.609

23 31 0.3 0.088 0.262 0.451 0.707 0.519 0.690 0.131 0.128 2.837

24 32 -* 0.712 2.575 1.378 2.895 0.699 0.592 5.557 3.558 15.966

25 33 -* 0.084 0.180 0.158 0.780 0.029 0.986 0.103 0.282 2.428

26 34 -* 0.098 0.259 0.271 0.796 0.599 0.592 0.135 0.307 2.829

27 35 -* 2.998 0.5 22.898 5.990 5.489 0.986 22.913 13.798 72.324

28 36 -* 2.614 2.001 7.896 17.722 1.996 2.762 22.861 13.696 67.934

29 37 -* 0.954 0.800 5.527 7.285 9.381 2.17 2.061 1.510 28.334

30 38 -* 20.94 0.295 255.83 2.933 9.381 2.17 247.51 145.95 633.92


No

Stat

ion

num

ber

Sam

plin

g de

pth,

m

Solid

re

sidu

es, %


Ove

rall

alka

linity

in

НСО

3

Cl SO4 Ca Mg Na K

Sum

of

ions

and

ca

tions

31 39 -* 4.539 0.6 44.218 9.563 8.184 1.776 44.421 26.445 134.907

32 40 -* 0.494 0.238 0.790 5.221 1.497 1.973 2.779 1.946 14.325

33 41 -* 8.956 0.9 45.797 57.034 13.972 0.986 88.773 52.506 259.520

34 42 -* 1.994 0.75 7.896 7.176 3.393 3.156 12.666 7.808 42.47

35 43 -* 0.800 0.161 3.384 5.346 7.685 0.699 0.507 0.640 18.342

36 44 -* 1.256 0.648 7.106 3.619 1.996 0.986 8.391 0.512 22.934 37 45 -* 0.642 0.197 1.579 5.819 1.996 1.973 3.626 2.355 17.447 38 46 -* 0.099 0.160 0.158 0.811 0.399 0.411 0.319 0.538 2.716

39 47 -* 0.056 0.139 0.079 0.312 0.299 0.197 0.034 0.205 1.196 40 48 -* 1.432 1.0 6.317 7.051 3.992 1.397 12.05 7.987 40.830 41 49 -* 0.826 0.131 1.579 4.430 4.491 0.986 0.663 0.563 12.778 42 50 -* 0.252 0.420 0.451 1.934 0.599 0.592 1.614 1.28 6.680

Arithmetic mean value for the Contract Area

0.3 0.51 0.2 3.27 2.72 3.82 1.37 1.04 0.81 13.1

-* 2.36 0.61 19.3 7.14 3.73 1.35 22.3 13.2 66.0

* Surface soil samples were taken from near a wellhead of a previously drilled and shut-down well.

Table 21. Content of water-soluble salts in the ground of KGF

No

Stat

ion

num

ber

Sam

plin

g de

pth,

m

Solid

resi

dues

, %


Ove

rall

alka

linity

in

НСО 3

Cl SO4 Ca Mg Na K

Sum

of

ions

and

ca

tions

1 3

1 1.130 0.098 7.022 6.677 9.780 3.946 0.071 0.179 27.724

2 6 0.148 0.148 1.410 0.686 0.499 0.493 1.252 0.051 4.465

3 5 1 0.448 0.098 3.000 3.415 2.590 1.640 2.279 1.282 14.251

4 6 1 0.173 0.213 1.241 0.790 0.290 0.690 1.264 0.486 4.868

5 9 6 0.141 0.180 0.959 1.061 0.798 0.493 0.909 0.025 4.745

6 11

1 0.333 0.164 1.658 3.245 3.493 1.480 0.094 0.038 10.09

7 6 0.084 0.212 0.310 0.640 0.499 0.493 0.170 0.026 2.244

8 13 1 0.524 0.115 7.811 0.832 1.547 1.973 5.238 0.102 17.561

9 14 1 0.055 0.161 0.158 0.333 0.100 0.164 0.388 0.179 1.403

10 16 1 0.132 0.213 1.579 0.395 0.499 0.888 0.800 0.026 4.293

11 17 1 0.542 0.189 4.653 1.893 0.499 0.493 5.743 2.739 16.115

12 18 1 0.070 0.324 0.395 0.541 0.299 0.296 0.665 0.205 2.563

13 19 1 0.192 0.189 0.395 2.080 0.198 1.233 0.233 0.102 5.336

14 20 1 0.198 2.460 0.553 2.912 0.499 1.295 5.031 0.332 10.952

15 21 1 0.212 0.230 1.184 1.639 0.599 0.690 1.764 0.307 6.298

16 22 1 0.765 0.131 7.191 4.181 4.894 3.059 3.554 1.997 24.938

17 23 1 0.630 0.131 2.989 4.035 4.790 2.170 0.195 0.205 14.449

18 24 1 0.390 0.164 3.948 1.622 1.397 1.874 2.463 1.075 12.461

19 25 1 0.284 0.295 0.479 2.579 1.198 2.071 0.084 0.435 6.994

20 26 1 0.119 0.246 0.479 0.978 0.599 0.690 0.414 0.230 3.513


No

Stat

ion

num

ber

Sam

plin

g de

pth,

m

Solid

resi

dues

, %


Ove

rall

alka

linity

in

НСО 3

Cl SO4 Ca Mg Na K

Sum

of

ions

and

ca

tions

21 29 1 0.642 0.131 6.401 2.704 6.786 0.937 1.513 0.205 18.612

22 30 1 1.326 0.131 1.971 8.034 8.583 1.282 0.274 0.256 20.469

23 31 1 0.100 0.213 0.536 0.770 0.798 0.690 0.031 0.051 2.893 Arithmetic mean value for the Contract Area

1 0.41 0.29 2.68 2.48 2.47 1.38 1.53 0.5 10.8

6 0.12 0.18 0.89 0.8 0.6 0.49 0.78 0.034 3.82

Table 22. Agrochemical and organic composition of soils at KGF

No

Stat

ion

num

ber

Sam

plin

g de

pth,

m

рН Agrochemical composition, % Organic composition,

mg/kg

Gyp

sum

co

nten

t (S

O4),

%

humus Р2О5 nitrogen petroleum products phenol

1 3 0.3 7.01 0.782 0.0016 0.063 21.22 0.017 1.805

2 5 0.3 7.92 0.125 0.026 0.011 5.043 - 0.241 3 6 0.3 7.97 0.199 0.020 0.017 2.136 0.0065 0.384 4 8 -* 9.7 0.17 0.029 0.013 3.08 0.0405 1.736 5 9 0.3 6.45 0.465 0.0007 0.033 0.730 - 1.020 6 11 0.3 7.43 0.782 0.003 0.064 8.091 0.0740 1.481 7 13 0.3 8.00 0.111 0.001 0.009 1.969 - 0.132 8 14 0.3 7.85 0.088 0.011 0.007 1.877 - 0.164

9 15 -* 8.45 0.384 0.0150 0.025 5.59 0.0465 3.024 10 16 0.3 7.69 0.111 0.018 0.009 1.703 - 0.246 11 17 0.3 7.80 0.266 0.002 0.025 1.782 - 0.285 12 18 0.3 7.97 0.125 0.009 0.011 1.766 - 0.148

13 19 0.3 7.85 0.125 0.017 0.010 1.673 - 0.274

14 20 0.3 7.74 0.192 0.002 0.017 1.980 - 0.148 15 21 0.3 7.78 0.288 0.001 0.026 0.760 0.0550 0.186 16 22 0.3 7.06 0.214 0.002 0.019 1.220 - 0.357 17 23 0.3 7.65 0.236 0.002 0.022 1.040 - 0.132 18 24 0.3 7.06 0.162 0.001 0.014 0.620 - 0.247 19 25 0.3 7.43 0.266 0.003 0.024 0.410 - 0.126 20 26 0.3 7.83 0.184 0.003 0.016 1.060 - 0.165

21 29 0.3 7.08 0.302 0.0011 0.028 0.450 - 3.960

22 30 0.3 6.93 0.148 0.001 0.012 0.750 - 1.283

23 31 0.3 7.32 0.111 0.002 0.009 0.590 - 0.154

24 32 -* 8.12 0.140 0.0097 0.010 5.33 0.0305 0.174

25 33 -* 8.18 0.177 0.0097 0.013 1.92 0.0150 0.213

26 34 -* 7.73 0.103 0.0092 0.010 7.26 0.0105 0.716

27 35 -* 8.12 0.199 0.0079 0.015 278.12 - 1.021

28 36 -* 8.73 0.339 0.0028 0.021 36.45 - 0.901

29 37 -* 8.30 0.288 0.0140 0.021 2.28 - 0.565

30 38 -* 7.94 0.155 0.0024 0.011 727.80 0.0300 0.213

31 39 -* 7.51 0.347 0.0010 0.024 195.45 0.0645 0.870

32 40 -* 9.27 0.258 0.0013 0.018 2.40 - 0.340


No

Stat

ion

num

ber

Sam

plin

g de

pth,

m


mg/kg

Gyp

sum

co

nten

t (S

O4),

%


33 41 -* 8.06 0.192 0.0016 0.014 457.95 0.1990 2.427

34 42 -* 10.18 0.310 0.0150 0.019 46.56 0.0405 0.403

35 43 -* 6.92 0.288 0.0029 0.015 226.30 - 1.710

36 44 -* 8.68 0.782 0.0016 0.049 901.80 - 0.325 37 45 -* 8.61 0.236 0.0014 0.014 6.45 0.0680 0.811 38 46 -* 7.65 0.362 0.0116 0.020 43.05 0.1055 0.208

39 47 -* 7.80 0.612 0.0300 0.042 8.03 0.0690 0.216

40 48 -* 10.89 0.733 0.0072 0.032 158.88 - 0.165

41 49 -* 8.57 0.516 0.0017 0.037 344.89 - 0.710 42 50 -* 8.75 0.539 0.0092 0.031 7.70 - 0.162


0.3 7.52 0.25 0.006 0.021 2.71 0.0073 0.62

-* 8.46 0.33 0.0086 0.021 157.8 0.0033 0.82

* Surface soil samples were taken from near a wellhead of a previously drilled and shut-down well

Table 23. Agrochemical and organic composition of the ground at KGF

No

Stat

ion

num

ber

Sam

plin

g de

pth,

m


mg/kg

Gyp

sum

co

nten

t (S

O4)

, %


1 3

1 7.29 0.694 0.0015 0.051 4.630 0.032 0.856

2 6 7.68 0.162 0.0016 0.014 0.520 - 0.104

3 5 1 7.94 0.096 0.001 0.008 1.294 0.0235 0.186

4 6 1 8.18 0.066 0.011 0.005 0.902 0.0115 0.178

5 9 6 7.15 0.177 0.001 0.015 0.390 0.0155 0.104

6 11

1 7.94 0.671 0.002 0.052 7.816 - 0.423

7 6 8.12 0.125 0.002 0.011 2.821 0.0025 0.263

8 13 1 7.68 0.074 0.001 0.006 1.440 0.0105 0.186

9 14 1 7.97 0.088 0.011 0.006 1.428 - 0.137

10 16 1 7.79 0.074 0.029 0.006 2.529 0.0015 0.197

11 17 1 7.92 0.199 0.001 0.018 1.746 0.0195 0.132

12 18 1 7.74 0.088 0.025 0.007 1.408 0.0025 0.154

13 19 1 7.62 0.044 0.025 0.003 1.656 - 0.285

14 20 1 7.86 0.048 0.002 0.012 1.782 - 0.159

15 21 1 7.69 0.266 0.001 0.024 1.673 0.0280 0.181

16 22 1 7.06 0.207 0.001 0.018 1.080 - 0.439

17 23 1 7.52 0.236 0.002 0.010 0.440 0.0525 0.488

18 24 1 8.00 0.177 0.001 0.016 0.390 0.0165 0.203

19 25 1 7.63 0.155 0.002 0.013 0.260 - 0.121

20 26 1 7.57 0.184 0.002 0.016 1.090 - 0.126

21 29 1 7.05 0.229 0.0008 0.019 0.330 - 0.999

22 30 1 7.07 0.162 0.001 0.014 0.380 - 0,675

23 31 1 7.56 0.199 0.002 0.017 0.770 0.0245 0,137

Arithmetic 1 7.65 0.2 0.006 0.016 1.65 0.0111 0.31


No

Stat

ion

num

ber

Sam

plin

g de

pth,

m


mg/kg

Gyp

sum

co

nten

t (S

O4),

%


mean value for the Contract Area

6 7.65 0.15 0.0015 0.013 1.25 0.006 0.15

Table 24. Content of heavy metals in soils at KGF

No Station number Sampling depth, m

Metal content, mg/kg Pb Cd Cu Fe Mn

1 3 0.3 7.218 0.128 16.080 15,861.0 60.84

2 5 0.3 5.421 0.131 3.671 3,378.0 65.56

3 6 0.3 6.801 0.108 3.820 1,574.0 38.68

4 8 -* 17.304 0.258 20.86 13,215.5 69.52

5 9 0.3 7.656 0.187 16.344 24,721.0 112.0

6 11 0.3 6.448 0.116 4.872 7,284.0 76.18

7 13 0.3 7.386 0.037 4.099 724.0 23.94

8 14 0.3 6.544 0.124 6.482 6,932.0 81.12

9 15 -* 3.0163 0.075 17.825 11,198.0 133.34

10 16 0.3 10.012 0.082 4.377 487.5 58.54

11 17 0.3 10.511 0.255 7.867 3,015.0 143.10

12 18 0.3 6.522 0.119 3.778 2,988.5 66.54

13 19 0.3 4.624 0.078 3.316 1,149.0 70.08

14 20 0.3 6.173 0.125 5.239 5,399.5 100.44

15 21 0.3 4.237 0.118 4.594 3,022.0 58.98

16 22 0.3 8.094 0.210 9.397 7,757.0 104.88

17 23 0.3 8.204 0.158 8.427 7,305.5 92.52

18 24 0.3 7.584 0.162 8.096 9,709.5 100.12

19 25 0.3 4.641 0.140 6.107 10,320.5 65.04

20 26 0.3 9.730 0.160 6.769 5,778.0 70.12

21 29 0.3 5.626 0.125 7.190 16,010.0 26.36

22 30 0.3 11.821 0.127 6.949 13,515.0 100.34

23 31 0.3 5.344 0.120 5.006 4,503.0 79.96

24 32 -* 1.756 0.063 25.615 7,888.0 178.68

25 33 -* 9.825 0.055 21.785 13,150.5 21.6

26 34 -* 12.372 0.051 30.235 12,569.0 36.68

27 35 -* 6.865 0.099 20.595 22,212.0 56.0

28 36 -* 9.330 0.082 19.145 15,142.0 23.46

29 37 -* 9.689 0.075 46.21 9,672.5 147.84

30 38 -* 6.147 0.102 24.295 13,357.5 247.62 31 39 -* 34.167 0.073 23.5 22,215.5 19.04 32 40 -* 1.350 0.032 18.35 4,926.5 24.74

33 41 -* 19.788 0.096 35.385 23,534.5 130.5

34 42 -* 3.593 0.054 45.68 8,095.0 134.32

35 43 -* 16.0.78 0.075 23.105 9,853.5 161.9 36 44 -* 5.628 0.075 25.615 10,306.0 173.42

37 45 -* 10.423 00.082 21.125 9,827.5 147.84

38 46 -* 15.268 0.361 46.075 8,340.5 131.48




39 47 -* 6.460 0.176 23.765 6,957.0 110.74

40 48 -* 4.597 0.071 22.18 11,353.5 151.1

41 49 -* 7.314 0.061 16.9 12,543.0 174.42 42 50 -* 6.706 0.105 47.395 7,319.0 110.44


0,3 7,17 0.134 6.78 7,210 76,0 -* 9,83 0.106 26.6 12,180 111.4

MPC according to European standard values 32,0 1,0 none none 1,500.0

* Surface soil samples were taken from near a wellhead of a previously drilled and shut-down well

Table 25. Content of heavy metals in the ground at KGF



1 3

1 8.020 0.111 16.134 22,856.0 104.58 2 6 6.390 0.090 6.489 15,420.0 52.66

3 5 1 4.121 0.104 2.782 4,165.0 53.19

4 6 1 3.021 0.102 3.352 1,498.0 35.92

5 9 6 4.186 0.072 6.866 13,615.5 51.24

6 11

1 3.781 0.094 3.216 9,160.0 56.73

7 6 3.124 0.023 3.103 8,352.0 49.94

8 13 1 8.938 0.050 4.164 1,182.0 33.54

9 14 1 5.203 0.111 5.892 5,711.0 63.08

10 16 1 3.896 0.014 2.434 1,873.0 35.9

11 17 1 7.573 0.122 6.075 5,844.5 115.08

12 18 1 5.100 0.103 3.942 2,185.0 132.9

13 19 1 5.016 0.019 3.463 204.02 76.06

14 20 1 5.904 0.115 4.787 3,566.5 87.84

15 21 1 6.147 0.099 3.388 3,347.0 63.54

16 22 1 7.205 0.197 4.469 10,985.0 64.92

17 23 1 42.229 0.123 7.677 11,337.0 74.84

18 24 1 4.068 0.162 7.100 11,224.0 82.48

19 25 1 4.906 0.118 5.337 10,533.0 56.28

21 26 1 8.183 0.091 5.943 4,396,5 64,36

22 29 1 4.150 0.106 4.710 11,668,5 48,92

23 30 1 3.430 0.101 4.466 14,099,5 74,08

24 31 1 5.221 0.095 6.949 5,871,0 86,86 Arithmetic mean value for the Contract Area

1 7.31 0.101 5.31 7085 70.6 6 4.57 0.062 5.49 12460 51.3

MPC according to European standard values 32.0 1.0 none none 1,500.0


Table 26. Content of organochlorine pesticides in soils at KGF

No Station number

Sampling

depth, m

Components content, mg/kg alpha-


gamma-hexachlorocy

clohexane


dichlorodiphenyldichloroethan


1 3 0.3 0.001 - 0.019 - 0.017

2 5 0.3 0.001 - - - -

3 6 0.3 0.003 - - - -

4 8 -* - - - - -

5 9 0.3 0.001 - - - 0.006

6 11 0.3 0.001 - 0.002 - 0.004

7 13 0.3 0.003 - - - -

8 14 0.3 0.001 - - - -

9 15 -* Traces 0.001 - - -

10 16 0.3 0.003 - - - -

11 17 0.3 0.003 - - - -

12 18 0.3 0.003 - - - -

13 19 0.3 0.003 - - - 0.005

14 20 0.3 0.003 - - - 0.004

15 21 0.3 0.001 - - - traces

16 22 0.3 0.001 - - - traces

17 23 0.3 0.001 - - - 0.006

18 24 0.3 0.003 - - - 0.006

19 25 0.3 0.001 - - - 0.007

20 26 0.3 0.002 - - - 0.005

21 29 0.3 0.003 - - - 0.006

22 30 0.3 0.004 - - - -

23 31 0.3 0.001 - - - traces

24 32 -* - - - - -

25 33 -* - - - - -

26 34 -* - 0.001 traces - -

27 35 -* 0.007 0.009 - - -

28 36 -* - - - - -

29 37 -* - - - - -

30 38 -* - - - - -

31 39 -* 0.006 0.006 - - -

32 40 -* - - - - -

33 41 -* 0.244 - - - -

34 42 -* 0.001 0.001 - - -

35 43 -* 0.001 0.001 - - -

36 44 -* 0.001 - - - -

37 45 -* - - - - -

38 46 -* - - - - -

39 47 -* - - - - -

40 48 -* - 0.009 - - -

41 49 -* Traces 0.001 - - -

42 50 -* - - - - - Arithmetic 0,3 0.002 - 0.001 - 0.003


No Station number

Sampling

depth, m



gamma-hexachlorocy

clohexane


dichlorodiphenyldichloroethan


mean value for the Contract Area

-* 0.0124 0.0013 - - -

* Surface soil samples were taken near a wellhead of a previously drilled and shut-down well

Table 27. Content of organochlorine pesticides in the ground at KGF




gamma-hexachlorocyclohexane

dichlorodiphenyldichloro

ethylene

dichlorodiphenyldichloro

ethan

dichlorodiphenyltrichloro

ethane 1

3 1 0.001 - 0.026 - 0.011

2 6 0.001 - - - 0.008

3 5 1 0.003 - - - -

4 6 1 0.003 - - - 0.005

5 9 6 0.003 - - - -

6 11

1 0.001 - 0.004 - 0.005

7 6 0.003 - - - -

8 13 1 0.003 - - - -

9 14 1 0.002 - - - -

10 16 1 0.003 - - - -

11 17 1 0.003 - - - -

12 18 1 0.003 - traces - 0.004

13 19 1 0.002 - - - -

14 20 1 0.002 - - - -

15 21 1 0.003 - - - traces

16 22 1 0.002 - - - 0.004

17 23 1 0.001 - - - traces

18 24 1 0.002 - - - traces

19 25 1 0.002 - - - 0.004

20 26 1 0.002 - - - traces

21 29 1 0.003 - - - 0.004

22 30 1 0.002 - - - 0.004

23 31 1 0.001 - - - traces Arithmetic mean value for the Contract Area

1 0.0022 - 0.0015 - 0.0021 6 0.0023 - - - 0.0027

184. As we can see from Pictures 22 to 26 all the processed parameters of the surface soil at the wellheads of previously drilled wells are way above the average soil pollution level across the entire Contract Area, the south-eastern part of Kandym field being the most polluted.


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Picture 22. Distribution of petroleum products in soil (sampling depth – up to 0.3 m) at the wellheads of Kandym field wells


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Picture 23. Distribution of lead in soil (sampling depth – up to 0.3 m): ‘A’ – average across the Contract Area; ‘B’ - at the wellheads of Kandym field wells


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Picture 24. Distribution of copper in soil (sampling depth – up to 0.3 m): ‘A’ – average across the Contract Area; ‘B’ - at the wellheads of Kandym field wells


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Picture 25. Distribution of iron in soil (sampling depth – up to 0.3 m): ‘A’ – average across the Contract Area; ‘B’ - at the wellheads of Kandym field wells


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Picture 26. Distribution of manganese in soil (sampling depth – up to 0.3 m): ‘A’ – average across the Contract Area; ‘B’ - at the wellheads of Kandym field wells


Table 28. Grain-size composition of bottom sediments from surface water bodies of KGF

No Station number Percent of fractions of the following sizes, mm

Alphitite, % Visual Description

> 0.25 0.25-0.1

0.1-0.05

0.05-0.01

0.01-0.005

0.005-0.001

< 0.001

1 4 0.6 2.6 91.6 0.8 2.5 1.8 0.3 4.6 sand

2 27 0.2 1.9 54.1 13.0 7.9 15.3 7.6 30.8 medium-heavy sandy clay

Table 29. Content of organic matter and polynuclear aromatic hydrocarbons in bottom sediments of surface water bodies at KGF

No Station number

Ingredient content, mg/kg

benzol petroleum products Xylol toluol synthetic

surfactants phenol benzpyrene, microgram/kg

1 4 - - 4.1 - 1.5 0.024 0,19

2 27 - - 2.8 - 1.75 0.013 0,20 Arithmetic mean value for the Contract Area - - 3,5 - 1.6 0.019 0.2

Table 30. Content of heavy metals in bottom sediments of surface water bodies at KGF

No Station number Ingredient content, mg/kg

copper chrome (VI) chrome (III) iron zinc 1 4 - - - 3.2 0.265

2 27 0.004 - - 1.75 0.15 Arithmetic mean value for the Contract Area 0.002 - - 2.5 0.21

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Picture 27. Distribution of oil-oxidizing bacteria in soil, bottom sediments and water of KGF


4.7 Radiation 185. Along the KGF Contract Area the radiation background has been measured (during inintial Environmental Audit) at 20 sampling stations, and the samples of soil have been selected for determination of the concentration of natural radioactive nuclides in it.

186. The average natural radiation background along the KGF is 20-30 micro-roentgen /hour that does not exceed permissible annual average dose for local people. However, the averaged value for the Contract Area was 26.3 microroentgen/hour, whereas that for Kandym field is 25.8 microroentgen/hour (Picture 28). The concentration of radioactive nuclides in the selected samples is considerably lower than permissible level (refer Table 31 and Table 32).

187. Maximum activity of nuclides of uranium and thorium groups, as well as aggregate specific activity of natural radioactive nuclides is three times as lower as permissible level.

Table 31. Background radiation measurement results for KGF

No. Station number Measurement point

Background radiation level, microroentgen/hour

Permissible annual average dose rate, microroentgen/hour

2 5 Kandym field 25 30 3 9 Alat settlement 25 30 5 12 Alat settlement 20 30 6 13 Kandym field 22 30 7 16 Kandym field 25 30 8 17 Kandym field 25 30 9 18 Kandym field 28 30 10 19 Kandym field 30 30

Arithmetic mean value for the Contract Area 26.3 30 including that for Kandym field 25.8 30

Table 32. Radionuclide Content in the Soil of KGF

No. Station number

Radionuclide content, Bq/kg Aav(Th) Aav(U) Aeff.

Permissible Aeff Pb212 Bi212 Ac228 Pb214 Bi214 Ra226 U238

1 3 17 15 13 14 14 19 <20 15 <17 76 370

2 5 21 24 21 18 16 24 <20 21 <20 95 370

3 9 20 13 19 18 17 23 <20 17 <20 84 370

4 11 18 16 15 15 13 21 <20 15 <17 78 370

5 12 17 26 18 16 13 19 <20 19 <17 87 370

6 13 21 20 20 19 20 12 31 20 21 74 370

7 16 19 25 16 15 11 19 <20 18 <15 81 370

8 17 24 24 19 23 20 26 23 22 23 95 370

9 18 19 27 17 16 14 20 <20 19 <18 82 370

10 19 19 19 16 16 15 18 <20 17 <17 79 370

11 20 21 25 19 26 23 47 32 21 32 116 370

12 21 20 28 11 18 15 24 <20 18 <19 96 370

13 22 21 22 20 18 18 21 <20 20 <19 86 370

14 23 14 15 14 14 13 7,3 <20 14 <14 64 370

15 24 16 20 20 17 14 9,1 20 17 15 67 370

16 25 21 22 21 19 17 23 <20 20 <20 87 370

17 26 17 12 19 16 14 14 36 16 20 72 370

18 28 19 20 21 15 14 26 <20 19 <19 90 370

19 29 27 35 25 21 19 37 <20 27 <24 116 370


No. Station number

Radionuclide content, Bq/kg Aav(Th) Aav(U) Aeff.

Permissible Aeff Pb212 Bi212 Ac228 Pb214 Bi214 Ra226 U238

20 30 19 25 19 16 12 33 <20 19 <20 95 370

Arithmetic mean value for the Contract Area 86.0 370

including that for Kandym field 84.3 370

188. As seen from Tables 31 and 32 radionuclide content in samples collected from KGF is significantly lower than the established permissible value. For comparison, radiation environment at this Contract Area is more favorable than that at Khauzak-Shady.

189. Diagram of distribution of background radiation across the territory of the Contract Area is shown in Pictures 28 and show distribution of activity of uranium series and thorium series radionuclides as well as the total specific activity of natural radionuclides.

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Picture 28. Distribution of activity of (A) uranium radioactive series and (B) thorium radioactive series nuclides and total specific activity of natural radionuclides (C) at KGF

190. As seen from Picture 28, the average background radiation levels for the Contract Aarea do not exceed the permissible annual average dose rate (30 microroentgen/hour), except for the central and northern area of Kandym field and the western area of Akkum field, where some background radiation levels are close to the maximum values of the permissible annual average dose rate. The highest activity of uranium and thorium radioactive series nuclides, as well as the total specific activity of natural radionuclides are also observed in these areas, with the total specific


activity of natural radionuclides for these areas being three times lower than the permissible value established by SanPiN No. 0029-94.

4.8 Flora and Fauna 191. There is no nature protected areas inside the KGF Contract Area. The nearest area of potential ecological concern is Karakul reserve. Minimum distance from Karakul Reserve to Kandym GPP is about 10 km (2.5km away from the Contract Area boundary). Research on the control of shifting sands is underway in the nearby Karakul Reserve. The Karakul reserve was established by State Committee for Nature Protection of the RUz in 1971 to study the fixation of mobile sand dunes to protect irrigation systems from sand encroachment. An additional purpose was to restore the fauna and flora of the southern Kyzylkum desert, especially the Goitered Gazelle and migratory waterfowl.4

192. Taking into account that Karakul Reserve is located outside Kandym group of fields, and all routes (automobile road and railway) will go outside its boundaries (detour) there is significantly low possibility of having cumulative impact on Karakul Reserve. The anti-desertification program which is already in place contributes to this effort of sand fixation. Awareness enhancement training among workers over the years will also be conducted, to share the work of nature conservation measures and assign personal responsibilities. Restoring vegetation and avoiding bird nesting areas and migratory routes (during Spring and Autumn), coupled with enhanced monitoring program and hunting/poaching control on staff, could be some of the main features of this Wildlife Conservation Program.

193. Plant cover reflects the condition of natural complex. Due to the reason, that the climate is dry, lack of rainfall the natural flora of the KGF is represented mainly by mixture of different herbs and bushes on the sands. Main difference of such psammofit (sabulose plants with strong and long roots) association is presence of white saxaul.

194. Flora is represented mainly by ammophilous plants (sand-loving plants, desert inhabitants). Among hardy-shrub species cherkez, kandym and saxaul are prevailing. The average height of the bush is 1-1.5 m, age – 10-25 years. Spread of plants is not uniform. On barchan sands among herbaceous vegetation selin and yantak may be found. Total cover of sands by plants does not exceed 5-10%.

195. On sands tree vegetation is represented by separate trees of saxaul and sandhill wattle. Shrub, semi-shrub vegetation and herbs are spread everywhere. In the north part of the KGF boyalich, artemisia, yantak with height up to 30-40 cm may be found, and among herbs the most common is ilak. Flat and hillocky sands are covered by shrubs (chingil, thistle and other, with height up to 2 m) and herbs (ilak, selin). Plant cover on dunes is much rarer.

196. Main floral species in the area are: kandim, white artemisia, sand artemisia, gray artemisia, ephedra, ak-kuray, tamarisk, sarsazan, black artemisia, cherkez, boyalich, tetir, keurechnik, haloxylon desert, kiltik, kampir-chapan, kozi-kulak, jindjak, karral, alhagi or yantak, ferulla fragrant.

197. Trees (lignosa) are found on channel bottomland (on the channel banks). In populated areas orchards and vineyards are found.

198. In the process of visual and route observations carried out within the framework of initial Environmental Audit (2004-2005 year) in the territory of Kandym group of fields there were not detected any plants registered in the Republic of Uzbekistan list of the endangered, threatened and rare species, which are under government protection (Red Book of the RUz).




199. The most common fauna are the following species of reptiles: Central Asian tortoise; comb-toed loricate and gray gecko; steppe agama; toad agama; lined, cancellate and multicolored lizards; desert monitor; long-legged skink; snake-eyed skink; glass-lizard; and lebetina viper.

200. Among mammals the following species are found: comb-toed and Turkmen jerboa, squirrel, mole lemming, field mouse, Libyan jird, tolai hare, Brandt's hedgehog, jackal, fox, dune cat.

201. There are very few birds in Contract Area. However, in spring, during blossom and in autumn, when it rains, shoal of migrating birds is very often seen in this area. Afterwards birds fly off and only birds which can adapt to life in the desert remain. The most common birds for this area are: houbara, houbara bustard, both species of hazel hen, pintail and black-bellied, both species of bee-eaters, goldish and green, desert nightjar, desert finch, desert sparrow, desert warbler, desert lark, saxaul desert jay, carrion crow, magpie, hoopoe, great tit and others.

202. The following arachnoid and insects are very common in Contract Area: parti-colored scorpion, camel spiders, harvestmen ordinary, karakurt, pentatomid bugs, white ant, mud-ball building ant, ant-xerxes, Polyphaga aegyptica, field-cricket, and others.

203. On the result of data acquisition, based on documents study, the following representative of fauna are entered into Red Book of the RUz (Latin name and common name where available) inhabited on Bukhara region:

- Hemiechinus hypomelas B (hedgehog)

- Tadarida teniotis R (free-tailed bat) - Gazella subgutturosa (goitred) - Phasianus colchicus zerafchanicus

(pheasant) - Chlamydotis undulate (houbara

bustard) - Pterocles alchata (sand grouse) - Circus macrourus (steppe harrier) - Aguila heliaca Savigni (imperial

eagle) - Hieraaetus fasciatus (hawk-eyed

eagle)

- Falco cherrug (saker falcon) - Naja oxiana (Central Asian cobra) - Varanus griseus (grey monitor lizard) - Lythorhynchus rigewayi Boulenger - Kohlia pavlowski - Laphiragogus kohlii - Larra transcaspica F. (wasp) - Eremochares mirabilis (wasp) - Laothoe philerema (moth) - Streblote fainae (eggar - moth) - Glaucopsyche charibdis (butterfly)

204. Besides visual observation of the condition of flora and fauna on the KGF and route exploration ecotoxicological and pathologic studies of samples of flora and fauna have been performed (in special laboratory).

205. The samples of flora are as follows (Latin name and common name where available). The plant collection points are in Attachment 3.1.

Table 33. List of Plants Collected from the KGF

No. Plant Name Contract Area R-2 Locoweed (Astragalus vilosissimus) KandymR-3 Glasswort (Salsola Richterii) Kandym R-4 Broom sedge (Aristida pennata) Kandym R-5 Halothamnus (Halothamnus subaphyllus) KandymR-6 Glasswort (Salsola sp.) Kandym R-7 Prostrate summer cypress (Kochia prostrata) Kandym R-8 Sagebrush (Artemizia diffuza) Kandym R-9 Smartweed (Acroptilon reptans) Kandym R-10 Squawbush (Lycium ruthenica) Kandym


206. The fauna has been studied on the samples of (Latin name and common name). The plant collection points are in Attachment 3.1.

Table 34. Description of Animals Caught at the KGF

Name of Species Contract

Area Body

Weight, g Length, cm Age, years Sex

1 Long-clawed ground squirrel (mammal) - Spermophilopsis leptodactylus Kandym 425 22 1-2 male

2 Tolai hare (mammal) - Lepus tolai Kandym 1800 56 2 female

3 Midday gerbil (mammal) - Meriones meridianus Kandym 130 13 1-2 female

4 Midday gerbil (mammal) - Meriones meridianus Kandym 115 12 1-2 male

5 House mouse (mammal) - Mus musculus Linnaeus Kandym 40 6 1-2 -

207. Additional information is given in “Handbook of plants and animals in Khauzak-Shady and Kandym Group of Fields (Bukhara region)”, Attachment № 4.

208. Ecotoxicological researches of accumulation of microelements and pesticides in tissues of plants of the KGF have been conducted for the purpose to identify the grade of affect on their physical, chemical and physiological condition, as they serve as food reserve for most living organisms.

209. All organochlorine pesticides identified in the tissues of plants belong to the dichlorodiphenyltrichloroethane group. Small concentration of all components of pesticides in plant tissues allows making conclusion, that pesticides do not considerably affect toxicological situation and affect to the living organisms is caused by chemical pollution of land ecosystem by other components, namely, by heavy metals and oil products.

210. The results of ecotoxicological researches of plants show, that initial physical and chemical conditions of the KGF, generally, are not favorable and make negative impact to physiological condition of flora and consequently to fauna as well.

211. The results of laboratory analysis of natural pre-project levels of accumulation of heavy metals and pesticides in tissues, fruits and roots of plants, collected from KGF, confirm the negative initial toxicological situation. High level of accumulation of microelements in macrophytes of land areas will cause intoxication of herbivorous animals (gnawing animals), which leads to histopathological changes in their liver and muscle tissues.

212. Concentration of aromatic polycyclic hydrocarbon and heavy metals in tissues of animals depends on species of samples studies, biology of their food, age factors and type of tissues.

213. It is necessary to note that relative low values of the most toxic agent among all aromatic polycyclic hydrocarbon is benzopyrene (not more than 0.002 mcg/g of net weight) in all tissues of all species of animals and fishes. The identified levels of metabolites of aromatic polycyclic hydrocarbon in tissues of animals, make toxicological affect, that is confirmed by the results of histopathological studies of organs.

214. The greatest amount of accumulations of aromatic polycyclic hydrocarbon and heavy metals and, as a consequence, the greatest pathologic deviations have been identified in liver of animals and fishes in question, and the lowest amount has been discovered in germ glands.

215. Liver structural imperfection, necrobiosis of hepatocytes and flaking of muscle fibers (myopathy) in a greater degree may be observed in root-feeding animals as opposed to fruit-feeding animals.


216. In order to study the influence of environmental conditions on the physiological state of living organisms, the researchers caught those non-migrating fauna representatives (rodents and birds) inhabiting the Contract Area, whose primary food supply comes from fruits, stems and roots of plants growing in the area.

217. Considering the time of field studies and the timeframes for fulfillment hereof, it was not possible to catch representatives of reptiles for ecotoxicological and pathomorphological studies, due to the fact that the said animals hibernate at the time. Brief description of some mammals and rodents caught at Kandym gas field.

218. Tolai hare (Lepus tolai). Belongs to double-toothed rodents. Inhabits deserts, steppes, and travels to the mountains up to the highest point of the archa forest. Eats primarily herbs and earthnuts. It is generally a nocturnal animal. Gives birth to several babies per brood, several broods are possible within one year. The number varies significantly by years depending on the conditions. Can be harmful for agriculture. This is a huntable species.

219. Long-clawed ground squirrel (Spermophilopsis leptodactylus). Belongs to rodents, the genus of true squirrels. Body length - 14-25 cm. Lives in burrows, often is colonies. When looking around, stands up straight and produces a typical whistle. This is a hibernating animal. Eats herbs and earthnuts. Gives birth to 2-10 babies per year. Is a pest of crops and a natural carrier of a whole range of dangerous diseases, including the plague.

220. Midday gerbil (Meri-ones meridianus). Belongs to rodents, subfamily of hamsters. Body length varies (an average of 10-12 cm). Looks like a rat, but with a tail down and with a tuft on the tail. Active at night. Lives in steppes and deserts. This is a burrowing colonial animal. The burrows are complicated and have many exits and entrances. The number of these species can be very high. It is generally considered to be one of the rodents inhabiting deserted areas. The gerbil is herbivorous. It often cuts the roots of saxaul and other large bushes. Building burrows on road embankments, canal slopes, etc. can lead to their distruction. This animal is a carrier of dangerous infections (the plague, leishmaniasis, etc.).

4.9 Social situation analysis 221. One of the compositions of initial Environmental Audit has been the study of objective and subjective issues in social sphere of the area, on which the KGF is located, namely demographic information of the local people and information on land use of the area and procedures covering transfer of lands for non-farming needs.

222. Demographic Information. Below official data (statistical) as of 2004 is set out, specifying the social aspects of the area.

223. Karakul District, where the KGF is located, occupies an area of 9.9 thousand sq. km. The density of population is 12.7 persons per 1 sq. km. The population is 125.3 thousand people. Roughly, a fifth of them live in Karakul, an administrative centre.

224. The local population is Uzbek, a Turkic ethnic group which also comprise the majority population of Uzbekistan. The language of communication and paperwork is state language, Uzbek language. The percentage of people, speaking Russian language is 44%, most of them dwell in Karakul. Ethnographic composition of population of this district is represented by the proportions as follows: Uzbek – 98.48%, Tatar – 0.56%, Russian – 0.33%, Turkmen – 0.196%, Ukrainian – 0.05%, Tajik – 0.05%, Kazakh – 0.067%, Azerbaijanian – 0.04%, Byelorussian – 0.01%, others – 0.2%. While a small percentage of the population have a different nationalities, these groups are not considered Indigenous Peoples as per ADB SPS definition.

225. Based on the 2004-2005 Environmental Audit population data, the population increase is 17% at Karakul district and this is due to high birth rates of 21.4 people annually per 1000 people and not to in-migration. Despite high level of birth level, over recent years there is a downtrend population growth due to high death rate and the fact that a lot of youths leave home in search of employment, better education and other reasons.


226. The average monthly salary is UZS 49,7 thousand in the region. Average monthly pension is UZS 12.7 thousand. Monthly income per head is UZS 18.9 thousand.

227. The number of officially registered job places in the region at population of 125.3 thousand persons is 22.4 thousand job places. Traditionally, the family is supported by men. The labor market is mostly oriented for men. At the same time, according to official data, the percentage of unemployment does not exceed 3% in the region, which does not match the real situation. Meanwhile the trend of unemployment increase may be observed in this region for the last four years.

228. The number of officially registered jobs in the district with the population of 125,300 people, is 22,400. At the same time, as the official figures have it, the unemployment rate in the district does not exceed 3%, which apparently does not correspond to reality. However, between 2001-2003, the growing unemployment trend in the district was obvious. Figure 5.2 shows the official unemployment curve for Karakul district. Current figures on unofficial unemployment are not available. However, it seems to be high, as there are families, in which, members able to work, without being registered with employment agency, go to Tashkent or other CIS countries looking for a job.

229. Data on migration movements is not available either. As local people say, the main migration of Russian speaking people has already taken place. Currently, significant migration movements are not observed.

230. Level of health of the population is approximately same, as in the national level. There are death cases caused by non-inflectional diseases, where diseases of cardiovascular nature are in priority.

231. The level of infant mortality is very high, although the trend to decrease is observed for the last years. The main reasons of infant mortality are non-infectious diseases. The most mortal cases come to perinatal period. The trend of increase of mortal cases caused by genetic damage may be observed.

232. The most common infectious decease in this region is hepatitis. No cases of AIDS have been registered. Infant mortality, according to official data in Karakul district is mostly absent.

233. Increase of number of infectious diseases on some clinical entities in most of the cases is caused by shortage of water of potable quality, lack of sewage system.

234. The sources of water supply are rivers, canals and wells. In the rivers, canals the water is fresh, but not always the water meets the requirements of quality, specified for potable waters; water in wells is saline.


Table 35. Indexes in the area

Facilities in the area Percentage of population with access Water supply, % 16.1 Gas supply, % 82.7 Telephone services, % 56 Availability of hospitals, first-aid posts, other medical centers: District hospital 1 Clinics 2 rural outpatient clinic 27

235. The area of Alat district, where the 18km section of the railway branch (Kandym GPP- Khodjadavlyat station) and 52km access road from Kandym GPP to well 305 and 23km water duct and intake facilities are located, has a land area of 3,200 sq. km with the population density of 24.6 people per 1 sq. km. Around 21% of the population live in the center of the district i.e. Alat city. The district is primarily populated by Uzbeks - 96.7% (76.6 ths Uzbeks from the total of 79.2 ths people of the district’s total population). The ethnic composition of the rest of the district’s population is made up of the following percentages: Kazakhs – 0.63%, Turkmen – 0.5%, Russians – 0.38%, Ukrainians – 0.13%, Tajiks – 0.38%, Tatars – 0.38%, Bashkirs – 0.38%, Azerbaijani – 0.25%, Belarusians – 0.25%. The Uzbek language is used for communication and workflow. Around 42% of the population speak Russian, with the majority living in Alat.

236. As the official statistics has it, 43.56% of the able-bodied citizens are employed. Average monthly salary amounts to 22.5 ths sum, average monthly pension is 17.1 ths sum. The average monthly income per capita amounts to 16.8 ths sum. The problem of employment is rather pressing for the district. The unemployed are mostly youths and women. According to the official unemployment figures, on average 60.8% of the unemployed are women. The percentage of young people who are unemployed is also rather high. Table 36 shows employment exchange data on employment of youths. As seen from Table 36, the unemployment level of youths remains high, irrespective of the increase in their percentage in the overall population.

Table 36. Data on Employment of Youths in Alat District

Indicator Year

2001 2002 2003 1 2 3 4

% of population in the age 15-25 18.5 18.6 19 % of unemployed among youths (14-30 years of age) 40 40 40

237. There are neither official figures as to the number of people working abroad, nor on migration processes. Unofficially, migration processes today are insignificant, and no more than 4-5 families leave annually. There are virtually no newcomers in the district.

238. Annual population growth for the Alat district amounts to 15.8 people per 1,000 individuals. Such a high indicator is accounted for by the natural birth rate.

239. Karakul and Alat districts can provide the KGF facilities with labour resources, but their professional skills and competence will not be very high. There might be some complications in communication because less than half of the population speak Russian.

240. In general, during the Environmental Audit, the social sphere of Karakul and Alat districts has been defined as a region with high level of unemployment, increasing migration movements, low level of education, and medical service. In this case, one of the aspects to enhance the social conditions is to attract external investments in the district, provide employment opportunities to local population and enabling to change the socio-economic environment of Bukhara region.


241. Land Use and Processes for Allocation of Lands for Non-Farming Needs. Construction of project facilities will require permanent acquisition of 845.16 ha of land and temporary/provisional acquisition of 3,636.86 or a total of 4,482.02 hectares (ha) of land. All provisionally acquired land comprising 81% of the total land required for the project will be used for construction of linear objects, e.g. in-field pipelines, hence the impacts are temporary. Lands comprising the Kandym gas fields are classified as agricultural and forest lands. Prior to the Project these lands were and at the present time are leased to Karakul forestry farm and Karakul co-operative farm. These lands are used respectively by forest farm for sand binding by sowing and planting wild grasses and shrubs and by collective farm for pasture.

242. Article 23 of the Land Code states that the allocation of a land plot is made through a Decision of the Cabinet of Ministers of the Republic of Uzbekistan, obast (province) hokims, and district hokims in accordance with the procedure established by legislation. According to this article, non-agricultural land or land not usable for agricultural purposes, or agricultural land of non-classified quality shall be sold for purposes of constructing industrial premises, railroads and automobile roads, communication and power lines, and main pipelines as well as for other non-agricultural needs. The provision or sale of land lots for these purposes out of forestry land shall be implemented primarily in areas covered with bushes and plants of low value rather than forestry resources. It shall be prohibited to take possession and use of the provided (sold) land plot until the authorities in charge of land use have established the boundaries of the plot concerned and have issued relevant documents certifying the right of possession or the right of use of the land. The procedure for acquiring land and its use is specified in the legislation.

243. The procedures for transferring land plots for non-agricultural and non-forestry purposes is established by the RCM No. 248 of 27.05.1992. According to this regulation, any enterprise, organization, intending to acquire a land plot for non-farming needs will send a request to the relevant Khokim of district where the requested land plot is located.

244. The District Khokim will review the request and send it to the standing district committee for selection and allocation of land plots and assign the district land resources management and land cadastre service for addressing the land selection and allocation matter related to allocation of the requested land plot and execute a report of selection and allocation of land plot signed by all committee members.

245. The district land resources management and land cadastre service will prepare the relevant documents of land management and a draft resolution of district Khokim and send it to Khokim for approval.

246. The approved land allocation, in case of allocation of an irrigated land plot or a land plot of over 10 ha in area from pasturelands or other lands, the Khokim will send the resolution to the regional Khokim for approval.

247. After approval by the regional Khokim, the resolution on land allocation will become effective.

248. The Operator acquires lands in turns of facilities construction and will follow the above procedures as required by law. As per the Resettlement Framework agreed with ADB, these lands will also be screened for involuntary resettlement impacts. The estimated total land requirements for the Project and indicative timing of land withdrawal are shown in Table 37.

Kandym Gas Field Development Draft EIA – 29 March, 2011 81

Table 37. Land Requirements for Kandym Project Facilities

District

Project Facility (Enumerate all permanent and temporary project

facilities)

Estimated land area required

(hectares)

Permanent Use

(hectares)

Temporary use

(hectares)

Duration of temporary

use

Official land Classification

Present Land Use

Present Land-User

Land usr consulted? (Yes/No)

Expected Year of Acquisition

Status of Land Acquisition

(31 Dec 2010 ) Bukhara region

Karakul district

Production wells 121 pcs х 3,5 ha 423,50 43,56 379,94 3 years agricultural (pastures)

agricultural (pastures)

State forestry "Karakul" and Cooperative

farm "Karakul"

Yes 2010 year -15 wells; 2011 year -27 wells; 2012 year- 24 wells; 2013 year -13 wells.

245,26 ha for wells, shift camp, temporary road, water wells, 10 and 35kW high voltage lines

No

Flow lines well-cluster 231.6 km х 28 m 648,48 648,48 2013 year Collector cluster-cluster 9.7 km х 33 m 32,01 32,01 Collector cluster-gathering station 91.8 km х 33 m 302,94 302,94 Collector gathering station GPP 87.1 km х 39 m 339,69 339,69 Cluster site 21 pcs х 1,5 ha 31,50 31,50 Field roads GPP-cluster 188.6 km х 20 m 377,20 188,60 188,60 Fuel gas electrochemical protection, connection GPP -cluster 188.6 km х 50 m

377,20 1,00 376,20

GPP site 350,00 200,00 150,00 Railroad 31.0 km х 80 m 248,00 108,50 139,50 Road 31.0 km х 20 m 62,00 31,00 31,00 Water duct 31.0 km х 10 m 31,00 31,00 Sales gas pipeline 59.0 km х 50 m 295,00 1,00 294,00 Road and electrochemical protection GPP–tie-in point of sales gas 59.0 km х 50 m

295,00 60,00 235,00

Power transmission line -220 45 kmх15 m 67,50 3,00 64,50 Communication 45.0 km х 10 m 45,00 45,00 Field camp 10,00 10,00

Bukhara region Alat

district

Railroad Kandym GPP- Khodjadavlyat station 18 km х 80 m

144,00 63,00 81,00 3 года agricultural (pastures)


Alat State forestry and Cooperative farm "Alat"

Yes 2013 year No

Road Kandym GPP - well305 Khauzak52km х 20m 104,00 52,00 52,00 Water duct 23 km х 10 m 23,00 23,00 Intake facilities 25,00 25,00

Bukhara region

Djandor district

Sales gas pipeline 25.0 km х 50 m 125,00 1,00 124,00 3 years agricultural (pastures)


Cooperative farm named

after "A.Timur"

Yes 2013 year No Road ,electrochemical protection, connection GPP –Central Asia –Center pipeline 25.0 km х 50 m

125,00 26,00 99,00

TOTAL: 4482,02 845,16 3 636,86


5. Expected Environmental and Social Impacts and Mitigation Measures

5.1 Expected Environmental Impacts and Mitigation Measures 249. The following is planned on the territory of the KGF: (i) Drilling of operational wells in quantity of 126 units, including 28 at the KGF satellite fields; (ii) Development of field site and gas processing complex with all necessary infrastructure (railway branch, access road, water wells, power transmission line and voltage reduction station, etc.); and (iii) Infrastructure construction for the construction period (shift camp for construction supervisory service, water intake facilities).

5.1.1 Wells construction

5.1.1.1 Impacts on Air Quality

250. At the time of wells construction on the KGF the sources of the impact on the atmosphere are:

diesel engine drives of the electric generators and drilling units; petroleum, oil and lubricants (POL) storage tanks; drilling mud mixing units (MMU); block boiler units.

251. Air emission during wells construction will be generated from liquid fuel combustion and open flaring of the gaseous components at wells testing. These emissions include the following: nitrogen oxides and dioxides, carbon monoxides, sulfur dioxide, acrolein, soot, hydrocarbons. Dust, will also be released during drilling mud preparation. Hydrocarbons evaporation occurs at intake and storage of POL.

252. However, the amount of these emissions is insignificant and will have no noticeable impact on the ambient air quality at the project area. For neutralization of hydrocarbon in the composition of the reservoir fluid (mix of liquid and gas from geological horizon) the neutralizing agent adding to the drilling mud (drilling agent) will be used. The sources of discontinuous (periodic action) operation (instantaneous release) are the flares. Given flare systems are meant only for flaring of sulfurous gas during well development/test (continuous flaring will be avoided). At that flaring of sulfurous gas emitted into atmosphere is compulsory requirement of the Republic of Uzbekistan legislation, in particular of Safety Regulations in Oil-and-Gas Industry of the Republic of Uzbekistan.

253. The air pollution sources are temporary and upon well completion the impact on ambient air will cease.

254. Expected maximum amount of pollutants per year at construction of one well is given in Table 38.

255. Initial size of sanitary protection zone (SPZ) for wells is set by the SCNP of the RUz and by the MH of the RUz in accordance with adopted sanitary classification (depending on the risk of activity). According to the accepted classification well-drilling is assigned to class 2 of hazard (moderately hazardous) and the initial size of SPZ for the wells is defined as 500 m.

256. Initial size of SPZ was clarified by calculating the maximum concentration of contaminants in the air (on the border of SPZ) using specialized software packages (specialized program complex “Ecologist”, approved by SCNP of the RUz to using on RUz). The calculations were performed for a maximum project volume of emissions, taking into account the geometrical parameters of emission sources, temperature and velocity of the emissions, climatic characteristics and wind rose in the area. Maximum calculated concentrations were compared with quotas on emissions established for the given territory. As a result of the calculations, the initial size of SPZ is retained (500 m), because maximum concentrations of contaminants in the air (on the border of SPZ) do not exceed the established quotas.


Table 38. List of pollutants at construction of 1 well, per year

Name of component

MPC, mg/m3

Class of hazard (1-4)*

Established quota

(of MPC portion)

Max. Concentration in

MPC portion (beyond SPZ)

Conforming to established quota** (+/-)

Percent of portion in emissions

Volume released,

tons

nitrogen dioxide 0,085 2 0,25 0,22 + 36,68 4,82045 carbon monoxide 5,000 4 0,50 0,08 + 28,89 3,79726

sulfur dioxide 0,500 3 0,33 0,23 + 13,32 1,75105 hydrocarbons 1,000 4 0,50 0,04 + 13,87 1,82343 Acrolein 0,300 2 0,25 0,25 + 1,38 0,18182 Soot 0,150 3 0,33 0,04 + 5,84 0,76772 Inorganic dust 0,5 3 0,50 0,00 + 0,002 0,0002 TOTAL 100 13,14193 * 1 - Abnormally hazardous, highest level impact on the environment; 2 - High-hazardous, high level impact on the environment; 3 - Moderately hazardous, average level impact on the environment; 4 – Low-hazardous, low level impact on the environment. ** Depending on the hazard class of a substance emitted into the atmosphere and the geographic location of the emission source, quotas on emissions are used in RUz. Quota is a reduction factor set by the SCNP of the RUz for the value of MPC of particular substance released into the atmosphere. Thus for different regions of RUz different quotas are being set. The sign "+" means that the maximum concentration of a substance emitted into the atmosphere is within the quota for a given substance in this area.

257. By all admixtures emitted at the well construction on the Contract Area the excess of permissible limits is not expected. Standard status of maximum allowable emission of contaminants to the air is fixed at the nominal emission level (Table 38).

258. Production operations related to the development (testing) and blowing of gas wells are the sources of intermittent (instantaneous) emissions. To avoid the formation of explosive concentrations of methane as well as in a view of the hydrogen sulfide occurrence in gas, the development and blowing of wells will be carried out with compulsory flaring of blow down gases (that is requirement of Safety Regulations in Oil-and-Gas Industry of the Republic of Uzbekistan). As a result of these operations the products of complete and incomplete gas combustion are emitted in the air. The volume of instantaneous releases during the development period depending on the actual production rate of each well may amount to 50 tons of pollutants. Pursuant to the Environmental Law of RUz the instantaneous releases are not rated.

259. For the purpose of minimization of pollutants emission to the atmosphere the drilling works execution plan provides for the following measures:

production cutback for the periods of unfavourable weather conditions (still air, ground inversion, overturning speed, etc.);

testing and development of well at favourable weather conditions (absence of still air, ground inversion, overturning speed, etc.);

periodic adjustment of fuel equipment of drilling equipment and vehicles diesel engines; diesel exhaust gases removal through hydraulic lock and fume stacks whose height shall

be calculated according to the regulatory requirements; use of closed and full-pressure systems at fugitive pollutants emission sources (drilling

mud preparation block tank, drill water collection and treatment systems, wellheads, receipt units for and measuring of formation fluids parameters incoming at well testing);

POL storage control, transportation in hermetically sealed containers; POL storage containers dyeing with light-reflecting paints to reduce the evaporation

coefficient; chemical agents shall be delivered to the drilling site in original packing avoiding its

damage, to organize the storage in special premises/sheltered places; the cement shall be transported in transportation tanks and cement mortar shall be

prepared in special cement mixers;


to conduct the periodic inspection and repairs of vehicles and special machinery; to conduct the air quality monitoring at the drilling site SPZ boundaries.

5.1.1.2 Impacts on Water Quality

260. During well construction, industrial and drinking water will be used. Industrial water is required for various drilling operations such as drilling mud preparation; for cleaning of drilling tolls; for pressure testing of drilling tools and casing tubing; for washing of squeeze aggregates; for accomplishment of accessory works (mopping, equipment cleaning, etc.); for diesels and assembly units. The requirements specified for the water quality will be low and demands of the drilling site for the sources of industrial water supply will be satisfied using the water from the artesian boreholes located at the drilling sites.

261. The Contract Area has no existing surface water source. The sources of industrial water supply are the underground waters developed through drilling of wells. The water from the water-bearing stratum of Bukhara paleocene levels from wells 260-350 m deep will be used. Mineralization of these waters is up to 2-3 g/dm3. Well production capacity is 120 m3/day. The distance from the well to the drilling site is about 50 meters. Water storage at the drilling site will be 200 m3.

262. Water from well through the compressor will be fed to the header tank placed on the metal base. By water line the water will be fed by gravity to the derrick- drawworks unit platform, to the drill pumps, to the diesel-engine drive and to drilling mud treatment and preparation unit.

263. The demand for industrial water is 3,259 m3 (for process of drilling 1 well), considering the water use in circulation. The majority of water is used during the drilling period – 72 m3 per day, total – 2,873 m3 per drilling period. The whole volume of this water is classified as irrevocable water consumption because of absorption by drilling rock, however this process finally returns water underground and replenishes groundwater.

264. The demands for drinking water will comprise 590 m3. Total demand will be 3, 849 m3. Waste water occurring at well construction by the formation conditions are divided into:

operational (mopping, cleaning of the equipment, cleaning of pulsating screens, discharged water from cooling system);

industrial (washing of drill pipes); emergency (pipeline burst, defect of isolation valves); natural (rain and melt water); leakage at preparation of drilling mud and chemical agents; domestic.

265. The most significant by volume and ability to accumulate harmful substances are the drilling wastewater (DWW), formed at drilling. Contaminative properties of DWW depend on the mineral composition of drilling cuttings (drilling chips), materials and chemical agents used for preparation of drilling mud. DWW are carried out to the surface with drilling sludge containing nontoxic breeds mainly composed of loams, sandstones, aleurolites. According to the calculations the volume of drilling wastewater from one well shall comprise 484 m3.

266. Drilling wastewater is characterized by rather high contamination level and contains a wide range of contaminants of different nature constituting a hazard for the environment.

267. At the drilling site the technologies of water treatment and disposal of treated DWW are implemented. Approximately 50% (200-250 m3) of DWW after treatment will be reused on drilling process in another well (for tolls washing, mopping, for preparation of drilling mud, for dissolution of chemical agents and other).

268. Other 50% of drilling wastewater together with waste drilling mud and drilling sludge undergo processing and hardening with subsequent burial in mud pit according to the procedure agreed


upon with the State Committee for Nature Protection. So 100% of drilling wastewater undergoes compulsory clarification and disposal.

269. Drilling wastes will be disposed in slurry pond (tank) after proper treatment – decontamination and hardening by the technology approved by SCNP of RUz.

270. Domestic wastewater is formed in the result of drilling site personnel life activity. The collection thereof is accomplished in water-tight septic tanks. Water disposal of domestic sewage comprises at the construction of one operational well 590 m3.

271. Total amount of waste water disposal at construction of 1 well is 1 074 m3 (590 m3 - domestic sewage and 484 m3 - drilling wastewater), at that discharge of waste water into surface water bodies and onto the ground is not applicable.

272. For the purpose of protection of water resources (including underground waters) drilling works execution plan provides for the following measures:

use the technological processes which significantly reduce the layer filtration properties at reservoirs penetration;

disintegrate the harmful stratum by casing string, and by setting casing string to accomplish the tapping of underground reservoir with drilling mud not containing toxic chemical agents;

construction of slurry pond (tank) shall be accomplished by using technology which excludes the wastes filtration to underground reservoirs (bottom and walls damp-proofing, embanking);

reuse the treated DWW for technological operations (washing of drilling mud cleaning and reconditioning system machinery, working sites equipment at lowering and raising operations, casing and drilling pipes pressure test, drilling mud preparation, etc.);

organize the water consumption record system in accordance with the established procedure;

accomplish the surface water condition monitoring in the drilling works region.

273. Upon completion of well construction at drilling site following two production wastes are accumulated: waste drilling mud (WDM) and drilling sludge (DS), requiring the decontamination and recycling by using the technology approved by SCNP of RUz (decontamination, hardening and landfill at the slurry pond (tank) of the drilling site).

274. During the well development (testing) through the use of acid treatment saline solution was formed in the amount of 60 m3/well and disposed of to the water-proof slurry pond (tank).

275. At accomplishment of associated operations wastes are formed represented in the form of iron and nonferrous scrap (including nonconforming metal containers), wiping non-greased rags, construction waste (paper containers wastes), plastic scrap (tires from tubing).

5.1.1.3 Impacts on Wastes Generation

276. At drilling sites and housing settlements the generated wastes will be composed of iron and nonferrous scrap (including metal containers), non-greased rags, construction waste (paper containers wastes), and plastic scrap (tires from tubing), busted and food wastes.

277. The total amount of waste formed at the construction of 1 well is given in the Table 39. While the total quantity of wastes generated in the process of construction of all 126 wells, is given in Table 40.


Table 39. Characteristics and amount of wastes at the construction of 1 well

Kind of wastes Class of hazard (1-5)*

Amount of wastes, t/well

Storage method Disposal method

scrap iron 4

2,0 At the site with hard surface

Timely removal and transfer of wastes according to the contract to the enterprises “Vtorchermet” and “Vtortsvetmet” for recycling. nonferrous scrap 4

0,5 At the site with hard

surface Drilling wastes

(DWW, WDM, DS) 4

347 At slurry pondв with bottom and walls

dampproofing

Decontamination, hardening and storage of wastes at the slurry ponds after decontamination according to the “Regulations for drilling wastes recovery at construction of the operational wells at the site of Kandym group of fields” approved by the SCNP of RUz.

wiping non-greased rags

4

0,09 In metal containers

Timely wastes removal to the approved landfills under agreement with “Olotobod” LLC

solid domestic wastes

5

1,513 In metal container at the site with hard

surface Food wastes 5

2,188 In metal container at

the site with hard surface

paper containers wastes

4

0,722 In metal containers

waste mercury-vapour lamps

1

0,0024 In store wagon, in hermetically sealed

metal container

Collection and removal of wastes for demercurization to the specialized organization (TC Sitora) according to the agreement

Plastic scrap 4

1,0 at the site with hard surface

Centralized removal of wastes to Samarqand city for passing for recycling to cooperative “Vtorma” according to the agreement

TOTAL: 355,015 * 1 - Abnormally hazardous; 2 - High-hazardous; 3 - Moderately hazardous; 4 – Low-hazardous; 5 – nontoxic. 278. Based on Table 39, the type of wastes generated using the selected drilling technology are mostly under Class 4 of hazard category (i.e. low-hazardous) which will have no adverse impact on the environment. The following are the proper measures for handling, collection, storage and disposal of the different kinds of wastes:

waste utilization (including domestic waste water) to perform in accordance with specially elaborated “Regulation for utilization of operation wells’ drilling wastes on Kandym group of fields”, receiving positive conclusion from the State Environmental Expertise of State Committee for Nature Protection of the RUz;

preparatory works (technologic sites leveling and flumes installation for waste transportation to slurry pond) to carry out in strict accordance with environmental requirements;

build pipelines or flumes (enforced concrete, metal, plastic, etc.) along site contour to interception, accumulation and transportation of domestic waste water and drilling wastes;

carry out construction of hydro-insulated slurry pond for collection, storage, deactivation and disposal of drilling wastes for unexpected emergency kicks;

carry out construction of hydro-insulated cesspool for domestic waste water collection; system of domestic and industrial wastes collection arrangement in accordance with

environmental legislation requirements, containers and other capacities arrangement for waste collection, provision of their regular emptying and transportation for utilization to specialized organizations.

279. To protect existing biocenosis and prevent soil pollution it is provided:

technology usage is assessed while well site planning, preventing (reducing) landscape technogenesis and groundwater hydrological regime change;


application of drilling mud system not containing oil and oil products as well as highly toxic additives;

using appropriate sorbents to localize and eliminate an emergency oil and liquid wastes spillage;

approach roads construction with maximum use of existing road network taking into account local natural conditions and necessity of culverts construction;

transport movement only along built roads providing safe traffic, preventing vegetation and soil cover destruction;

dismantling of reinforced concrete foundations, flumes breaking, site hydro-insulation, removal of concrete blocks for reuse, emergency pond, ditches, trenches, cesspools with ground from dike (technical land reclamation);

drilling site territory cleaning from metal scrap, construction garbage and other wastes with their transportation for disposal and utilization;

use of rubber shock dampers for diesels, power units and diesel power plants; use of highly flexible couplings for diesels and compressors; compensation and balancing of rotating blocks, metal springs and rubber shock dampers,

use of pneumatic compensators for drilling pumps; drilling equipment installation on concrete foundations.

Table 40. Nature and quantity of waste during construction of 126 wells

Kind of waste Volume of waste per well, t

Design number of wells, pcs.

Total volume of waste during construction of of all wells, t

1 class waste (used mercury lamps) 0.0024 126 0.3024 4 class waste (domestic refuse, scrap metal, drilling waste)

351.312 126 44,265.312

Nontoxic waste (SDW, food waste) 3.701 126 129.701 Total: 355.015 126 44,395.315

280. Technogenic impact under well construction and development of set of technical and environmental measures, was assessed and ecological experts confirmed that environmental impact will be local and of low level without irreversible processes.

281. The environmental measures provided above will allow successful well construction with observance of all environmental requirements.

5.1.2 Development of gas-condensate fields

282. The development of the KGF includes construction of multiple-well platforms (clusters), collection points (CP), infield pipelines, gas processing plant, necessary infrastructure (road network, power transmission lines, treatment plants, shift camps, water intakes, repair-mechanic bases, etc.). The concept of well production processing on Kandym Gas Processing Plant assumes necessity of constant flaring of fuel (pure) gas only on flare pilots (so-called “standby fire”). The process of acid gas recovery, treatment and processing involves provision of the maximum conversion of "acid" gases to commercial sulphur using the “Superklaus” process. The Superklause process is the recommended unit to meet technical specification on sulphur recovery efficiency to the level of 99% minimum. The given process is applied all over the world on similar objects and has no alternatives. Therefore in addition to complying with RUz safety regulations the best international practices as laid out in the HSE will be adopted.

283. Totally on Kandym Gas Processing Plant (i.e. GPP including gathering system) the provision is made for HP flare systems and two LP flare systems (on GPP). The given systems are intended for flaring of emergency gas discharges containing hydrogen sulfide (continuous flaring will be avoided). Thus flaring of sulfurous gases to atmosphere is a mandatory requirement of the


legislation of the Republic of Uzbekistan, in particular the Safety regulations in oil and gas industry of the Republic of Uzbekistan.

284. Under the KGF development, the following main sources of pollution are expected:

a) flare systems of the gas field (CP, clusters, units of treatment plants start and acceptance, etc.);

Given flare systems provide for continuous flaring at flare pilots (so called «pilot flame») of fuel (pure) gas only and they are meant for emergency flaring of sulfurous gas. At that flaring of sulfurous gas emitted into atmosphere is compulsory requirement of the Republic of Uzbekistan legislation, in particular of Safety Regulations in Oil-and-Gas Industry of the Republic of Uzbekistan.

b) condensate stabilization:

condensate storage reservoirs’ breathers;

exhaust shaft of two-stage centrifugal compressor of gas compression from separator and stabilization column;

c) sulfur production unit:

flue gas duct thermo-oxidizer (incinerator); technology of high sulfurous gas production, treatment and processing ensures maximum conversion of “sour” gas into commercial sulphur – “SuperClaus” process - with sulphur recovery efficiency of at least 99%, after which flue gases go to the unit for disposal of tail gases (incinerator unit);

This process is applied at the similar facilities in the whole world and has no alternatives.

d) booster compression station:

exhaust shafts of one-stage centrifugal compressor of conditional natural gas driven by gas turbine (3 threads);

e) GPP of low and high pressure flares, meant only for flaring of emergency sulfurous emissions from units operating under pressure (requirement of Safety Regulations in Oil-and-Gas Industry of the Republic of Uzbekistan);

f) technologic and domestic boiler houses;

g) automobile transport, special machinery, repair equipment;

h) fugitive emission of instrument room yard;

i) railway spur.

285. Predicted total emission of the KGF facilities are presented in Table 41.

286. Separate source of impact on atmosphere air will be railway spur. The load on atmosphere will depend on selected traction railroad engines (electric trains or locomotives) In case of locomotive selection, load on atmosphere air will increase by additional emission of oxides of sulfur, nitrogen, carbon, solid particles. Emission volumes will be directly dependant on freight traffic activity and specified on next design stages. At this stage locomotive emission are assessed as 0.4 t/t of fuel.

287. In case of electric trains’ selection, impact on atmosphere will be absent; the main factor for this option selection would be the environmental-economic justification.

288. Plant loading station is also a source of emission. Annual hydrocarbon emission under design condensate volume loading to cisterns is evaluated as 65-70 tons. Evaluation of elemental sulfur emission to the atmosphere at this stage is impossible because of absence of storage and loading methods. At further design stages, to minimize sulfur emission, it is necessary to provide maximum close system of sulfur storage and loading based on safety requirements.


289. A detailed inventory of emission sources of greenhouse gases will be held at the next stage of the EIA during establishment of standards of maximum permissible emissions of pollutants into the atmosphere (as part of EEA – 3 stage). At the current stage of design and the EIA procedure only consolidated parameter estimation of greenhouse gas emissions at facilities of Kandym group of fields is possible.

290. Actual volumes of greenhouse gas emissions are annually calculated by Operator and will be calculated within the whole period of project implementation with use of NCASI (National Council for Air and Stream Improvement) method. At that annual environmental monitoring program implemented by Operator from 2005 until present time includes monitoring of presence in open air of a number of accompanying elements included into the list of greenhouse gases: carbon dioxide, hydrocarbons (methane), nitrogen oxide (in equivalent to nitrogen dioxide).

291. The main source of greenhouse gas emissions is the process of gas flaring and popping of gas in process furnaces (boilers). Calculation of greenhouse gas emissions is conducted according to the Method of NCASI (National Council for Air and Stream Improvement).

Table 41. Emission from the KGF facilities

Ingredient Class of hazard (1-4)*

MPC**, mg/m3 Emission to atmosphere, t/yr

Total emission related to field part Carbon monoxide) 4 5,000 258,22 Nitrogen dioxide 2 0,085 7,248 Nitrogen oxide 3 0,600 1,812 Hydrocarbons (on methane) 4 50,000 135,905 Gas black 3 0,150 0,324 Sulfur dioxide 3 0,500 0,075 Total 403,584

Total emission to the atmosphere related to booster compression station Nitrogen oxide 3 0,600 980,186 Nitrogen dioxide 2 0,085 245,048 Carbon monoxide 4 5,000 1392,336 Sulfur dioxide 3 0,500 74,159 Total 2691,729

Total emission related to gas processing plant objects Hydrocarbons (on methane) 4 50,000 1616,494 Benzol 2 1,5 0,484 Methylbenzene 3 0,6 0,234 Benzene 3 0,2 0,112 Hydrogen disulfide 2 0,008 0,3353 Sulfur dioxide 3 0,500 3214,0949 Carbon monoxide 4 5,000 6482,95 Nitrogen oxide 3 0,600 824,351 Nitrogen dioxide 2 0,085 363,563 Gas black 3 0,150 6,686 Total: 12509,3 Grand total: 15604,613

* 1 - Abnormally hazardous, highest level impact on the environment; 2 - High-hazardous, high level impact on the environment; 3 - Moderately hazardous, average level impact on the environment; 4 – Low-hazardous, low level impact on the environment. ** MPC (Maximum Permissible Concentration) – according to Sanitary Norms and Regulations of the Republic of Uzbekistan No 0179-04 “Hygienic Regulations. List of Maximum Permissible Concentrations (MPC) of Pollutants in Open Air of Populated Areas in the Territory of the Republic of Uzbekistan” approved by Chief State Sanitary Inspector of the Republic of Uzbekistan.

292. The following are the main measures to reduce emissions of greenhouse gases in the course of design of technological facilities of Kandym group of fields:


Choice of technology of the ultimate separation of well production - the separation of liquid and gas (minimization of the volume of separated gas);

Choice of technology to maximize commercial sulfur recovery from well production (reduction of tail gas volume);

Ensuring integrity of the whole technological system by selecting the appropriate equipment and effective anticorrosion protection system;

In case there is information regarding incoming unfavorable meteorological conditions oil and gas activities related to flaring will be temporarily stopped.

293. According to the calculation results for dispersion of pollutants emitted into air from surface facilities at KGF (including GPP) maximum pollutant concentration outside sanitary protection zone will be below maximum permissible concentrations statutory in the Republic of Uzbekistan. Calculations were made (within the framework of the first stage of EIA procedure, which passed state ecological expertise) by means of licensed bundled software “EKOLOG” approved for use by State Committee for Nature Protection of the Republic of Uzbekistan.

294. Maximum ground level concentration of pollutants in open air is calculated with use of computer-assisted bundled software “ECOLOG” operating based on algorithms and calculating formulas specified in regulatory document of the Republic of Uzbekistan – OND-86 (general regulatory document) “Calculation Method for Open Air Concentration of Repugnant Substances Present in Plants Emissions”. When maximum ground level concentration is calculated the following factors are taken into account:

geometrical parameters of emission sources; mass and speed of emissions discharge into the air per unit of time; temperature of emissions; rate of repugnant substances fall in open air; influence of landscape; effects of different pollutants’ impacts summation; climatic and atmospheric characteristics of the area of enterprise location (speed and

direction of wind, yearly average temperature, etc.). 295. Results of maximum ground level concentrations calculation and analysis are presented in the form of maps showing industrial facilities site lay out and values of maximum concentrations in the points of computational grid. In Picture 29 a sample map for the most indicative substance of predictable KGPP emissions – sulphur dioxide – is given.

As it can be seen in the map according to calculation results outside KGPP industrial site (and accordingly outside sanitary protection zone) the highest concentration of sulphur dioxide is reached at the point with false coordinates 40000х25000 and it will make 0,25 MPC (0,125 mg/m3), that is below set forth in the Republic of Uzbekistan MPC = mg/m3.

296. Taking into account that: (i) nearest populated areas are located 10 km (town Alat) and 15 km (town Karakul) away from Kandym group of fields and respectively 25 km and 30 km away from Kandym field itself and GPP; and (ii) according to the calculation results for dispersion of pollutants maximum pollutant concentration outside sanitary protection zone will not exceed maximum permissible concentrations statutory in the Republic of Uzbekistan; it may be concluded that there is no possibility of Kandym GPP and KGF surface facilities affecting quality of open air in populated areas.


Picture 29. Expected Air Pollution Level by Sulfur Dioxide near GPP of KGF

297. To minimize pollutant emission to the atmosphere, work plan foresees the following measures:

selection of maximum possible degree of hydrogen disulfide in commercial sulfur;

use of hermetic operation equipment, valves and gas and condensate pipelines;

use of close system of gas condensate collection;

obligatory neutralization of toxic gases be method of thermal destruction in flaring systems;

design of flares, which height provides dissipation of gas combustion products down to allowable concentrations in the air of work site;


stationary sensors installation for control of hydrogen disulfide concentration in air ground level;

arrangement of local air control posts at the boundary of nearest settlements (within the fame of environmental monitoring).

5.1.3 Impacts on Water and Waste Water Quality

298. As shown in Picture 3, Lake Dengizkul and Lake Solenoye are located approximately 65 km and 10 km from Kandym group of fields respectively. The Operator does not plan to use the water or either discharge waste water into these water bodies or to the ground. It may be concluded that these two lakes will not be directly impacted by the operation of the Kandym project. The sources of potable water supply for the KGF will be coming from combination of Yamanjar canal and water wells that will be treated prior to industrial use. On gas processing plant’s site the following water supply systems are envisaged:

drinking water supply; industrial-fire water supply; recycling water supply system consisting of two cycles – close and open.

299. Intensive water requirements for the operations in gas processing technology are as follows:

desulfurization and gas dewatering; condensate stabilization; sulfur production.

300. At the stage of desulfurization and gas dewatering, water will be spent for acid gas, amine, compressors and pump bearings cooling. Under sulfur production, water will be spent for heat utilization and blowing machine cooling. In process of hydrocarbon condensate treatment and stabilization water will be spent for condensate and gas-water mixture cooling. Steam production water will be used for boilers feeding, which includes: steam production for fabrication technique (at the moment of start), compensation of steam losses in processing units, system filling at expense of boiler water blowing. On treatment plants water will be spent for cation exchanger backwash, backwash, cation exchanger cleaning from regeneration solution, mechanic filters washing.

301. Industrial water will be spent for open cycle recharge and chemical water treatment to produce softened water for close cycle.

302. Prevention of environment pollution with waste water and water consumption reduction will be by means of rational water use in enterprise and recirculation water supply. Predicted percent of recirculation water supply for gas processing plant is 98.5%, auxiliary – 13.2%. Volume of recycled water of main production will be 85 034 400 m3/yr, auxiliary production - 116 000 m3/yr.

303. Gas processing plant’s waste waters according to their origin are divided as follows:

domestic; storm (rain) runoff; industrial; groundwater.

304. Main sources of waste water are as follows:

boiler houses; drainage reservoirs of desulfurization and gas dewatering; condensate parks; blowing water from waste heat boilers and reactors-generators; washing water of equipment.

305. The following sewerage network is provided on gas processing plant’s site:


domestic; production-rain; waste water polluted with chemicals.

306. Domestic waste water will be conveyed by gravity through pipeline to sewerage pumping stations and then to the biological treatment plant.

307. Drainage of waste water from equipment hydro-tests, rainwater, and water from floor wet cleaning will flow to the production-storm sewerage system. Main sources of surface runoff pollution are the products of soil erosion, dust, building materials, raw materials and products in open warehouses, emission to the atmosphere, different oil products taking place due to leakage or vehicle and other machinery troubles, etc.

308. Rain and washing runoff for most polluted territories (diked areas) is withdrawn to system of production-rain sewerage. Production and rain runoff from diked areas are subject to physical-mechanical treatment and directed to injection into deep absorbing aquifers. Because the injection is one of existing methods of utilization an industrial liquid wastes, whish is optimal from ecological and economic perspectives and actively use in RUz.

309. Mineralized water from boiler house, blowing water from recirculation system after treatment from oil products and suspended particles are directed for injection into deep absorbing aquifers.

310. Planned water consumption of gas processing plant’s arrangement objects is presented in Table 42. Limits of water consumption and withdrawal for KGF surface facilities will be defined and approved by State Committee for Nature Protection of the Republic of Uzbekistan during development of ecological norms (within the framework of final stage of EIA procedure - Ecological Effect Assessment).

Table 42. Water consumption and withdrawal balance

Type

Water consumption, thousand m3/ year

Water withdrawal, thousand. m3/ year

Volume Source Circulating water system *

Effluents generation Volume Place for disposal

1. Primary production, including: 1 299.20

Underground water from

Operator’s water supply wells

(after treatment)

832.36 466.84

Injection into deep absorbing aquifers (after appropriate treatment)

1.1. Gas treatment and dehydration; 1 189.60 818.76 370.84

1.2. Sulphur production; 18.4 11.04 7.36 1.3. Condensate stabilization; 4.0 2.56 1.44 1.4. Flushing of equipment; 28.0 0.0 28.0 1.5. Cooling. 59.2 0.0 59.2 2. Auxiliary and other production facilities 760.0 520.8 239.2

3. Domestic, household and practical needs 18.0 0.0 18.0

Waterproof evaporation ponds after biological

treatment Total: 2 077.20 1 353.16 724.04 * Circulating water supply systems are such systems that allow to reduce fresh water consumption due to use of water circulation system – use of treated industrial waste water for process needs. Actual water consumption for circulating water supply is defined in supply lines of circulating water systems minus volumes of fresh water fed into the system for makeup. Water reused at GPP serves as solvent, heat medium, etc. Total design volume of circulating water system is 85,150.4 thousand m3/ year.

311. The measures to protect surface and ground water from contamination, rational use of water resources at thehave been considered in the preliminary stage of design it is foreseen:

maximum usage of re-circulated water system;


treatment of domestic waste water and discharge with consecutive utilization for plant irrigation;

production waste water treatment and injection into deep absorbing layers.

312. Additional water consumption is possible for steam station to clean railway cisterns at ware elevated structure, but these works are not provided by the project because this type of service will provide subcontractor on his own the territory.

313. Different kinds of wastes are generated in the operations of gas mining, collection, preparation and treatment processes. These wastes generated include the following used absorbents, catalysts and filters , motor oils,car tires, tubes, used batteris, used oil, scraps, domestic wastes and busted lamps. The calculated volume, level of classification of hazards and corresponding method of disposal are presented in Table 43.

314. Gas stripping slurry is also a production waste formed during gas pipelines and collectors cleaning.

315. Developed motor oils, car tires and tubes, batteries – result of vehicle operation.

316. Auxiliary departments (overhaul shop, production department) produce wastes like waste ends contaminated with oil, purchased scrap of black and base metal.

317. People working on plant and gathering stations and living in shift camp create solid domestic and food wastes and territory cleaning – sweep. Utilization of luminescent and mercury containing lamps leads to waste of the first class danger.

318. Waste characteristic evaluated at the preliminary stage of design and expected methods of its disposal are presented in Table 43.

Table 43. Waste characteristic and conditional volume

Waste name Quantity, t/yr Class of hazard (1-5)* Method of disposal Developed activated charcoal 44,4 4 Disposal on district polygon** of solid domestic

waste by specialized organization***. Developed mole sieves (zeolite) 2346 4 Disposal on district polygon of solid domestic

waste by specialized organization. Developed catalyst 427/ 5 лет 4 Disposal on district polygon of solid domestic

waste by specialized organization. Developed filter 0,056 4 Disposal on district polygon of solid domestic

waste by specialized organization. Developed turbine oil 2 3 Utilization for production purposes. Transfer to

specialized organizations for processing. Gas stripping slurry 20 м3 3 Gathering in collector. Disposal on polygon of

drilling wastes on Khauzak-Shady deposit. Solid domestic and food wastes 25,1 (SDW)

7,665 (Food waste) 4 Disposal on district polygon of solid domestic

waste by specialized organization. Sweep 116,6 4 Disposal on district polygon of solid domestic

waste by specialized organization. * 1 - Abnormally hazardous; 2 - High-hazardous; 3 - Moderately hazardous; 4 – Low-hazardous; 5 – nontoxic. ** special place approved by the SCNP of the RUz for wastes utilization. *** organization, which specialized on wastes utilization, contracted by Operator.

319. Thus, as a result of design solutions, wastes mainly of the 3-4 class of hazard will be formed.

320. To minimize impact on environment is the following measures are provided:

1. Mining control:

control of static pressure dynamics for evaluation of formation pressure and temperature dynamics in developed productive pools;


well gas-dynamic investigations; special investigations (hydro-geological, hydro-chemical, geophysical, etc.).

2. Well ties, tails, collectors:

cutoff valves installation on wells; utilization of pipelines made of high-strength pipe with raised WT; establishing system of inhibiting and electric-chemical protection against corrosion; equipment furnishing with safety bypasses, emergency flare; gas pipeline crossings over natural and artificial barriers in accordance with building

norms and rules; equipment furnishing with instrument piping and automation with remote control;

3. Protection against blowout and drifting:

selection of pipeline route with account of relief moving forms; mine site location on leveled and stable to deflation surfaces, in slightly desiccated

sand; communication routes location on leeward side of industrial objects; automobile roads location in slightly differentiated relief and on solid surfaces; location of point objects (PTL poles, etc.) in the least differentiated and most gross-

covered eolian forms of relief stable to deflation. 4. Land recultivation:

soil strengthening and improvement by perennial grass sowing with fertilizes on sands, integrated green zones creation near sites;

to carry land recultivation during installation and construction work, if impossible, but not later than during one year after work completion.

321. Thus, designed objects’ impact will occur at the stage of field infrastructure development, objects construction and their further operation. Thus, most impact will be made by gas treatment plant as being the largest object.

322. Impact of atmosphere air after design solutions realization will be as follow:

fuel gas burning to maintain duty flame on collecting points and gas processing plant’s flares;

Conception of well production processing at Kandym Gas Processing Complex provides for necessity of continuous flaring of fuel (pure) gas only at flare pilots (so called “pilot flame”). “tail” gas burning in incinerator in process of acid gas treatment on Sulfur removal

facility; gas compression with emission to the atmosphere burned gas products; from technologic boiler-house.

323. Impact on groundwater is connected with groundwater withdrawal for industrial and domestic needs. Gas processing production can be related to water-retaining manufacturing. System of recycling water supply significantly reduces fresh water discharge and, therefore, decreases impact on water objects.

324. During installation and construction works, impact of noise made by machinery and thermal may influence small animals and insect migration and partial death will be observed. Gas burning in flares partial death of insect will be observed.

325. Under project elements operation industrial wastes, consumption wastes and domestic wastes will be formed. During all operation period, separate collection of wastes will be implemented over type, physical-chemical properties, aggregate status, toxicity, fire and explosion danger and other signs determining danger degree for population health and human habitat. Disposal will be implemented on specialized enterprises over waste types.


326. Thus, the KGF will be developed under the conditions: observation of organizational-technical measures preventing soil, water and air

pollution; control of soil, water and air status; deactivation and timely utilization of industrial and domestic wastes; reclamation of construction sites.

327. Further development at each stage of KGF the environmental actions taken will allow it to operate following all requirements of nature protection.

5.1.4 Construction-period infrastructure

328. During construction of project facilities on the territory of the KGF, a shift camp for construction supervision service will be provided. The shift camp will include the following facilities:

1. Housing area for accommodation with canteen, first-aid station, gym and laundry. Accommodation premises shall be provided with water supply system, shower room with hot water, WC, dining room, provided with taps and sinks.

2. Water treatment plant, water works, evaporation pond, transformer room, diesel engine power plant inside container, communication container with 30 meter tower.

3. Waste water bacterial treatment plant “AS BIO 100” with drying area and evaporation pond.

4. Utility area –parking lots, storage rooms, toilets, sewage pumping station.

329. Equipments and facilities, will be provided with electric actuator that minimizes the emission of polluting agents to the atmosphere. Only diesel engine power plant with capacity of 358 kW as emergency power supply system will produce combustion products while electricity is off. Impact to the atmosphere will be minimal- 4 ton/annum of polluting agents.

330. Electric power supply of the construction site is intended to be carried out by laying 35 kV high-voltage line from 35 kV outdoor switchgear of existing 110/35/10 kV Electric Substation named “Gazli” (see Picture 3). The length of the line from “Gazli” Electric Substation to KGF is 42.65 km. Power supply facilities use is not resulting in affecting the atmosphere, forming of solid wastes.

331. For the needs of construction stage the water intake system has been constructed composed of (4 operational wells). Ground water from the said wells will be used for construction needs, as well as after desalting will be used for service and utility purposes of construction. Wells are located in square order. The distance between wells is 50-100 m. The depth of the well is 474.5 – 487 m. The 11 km motorway and electric power supply line are laid to the well area. Wells are equipped with bottom pumps Grundfos Sp 17-13 {Denmark} with capacity 5 l/sec. The electric power supply of the wells is intended to be made by connecting to 10/0.4 kV Transformer Substation, located close to the site.

332. According to Construction Regulations 2.04.02-07 (Section 10 Sanitary protection zone), for water intake facilities, in our case, sanitary protection zone it is water supply wells, sanitary protection zone must be provided. Zone of water supply source in the place of water intake must consist of 3 areas: first – high security, second and third – limitation mode.

333. The border of the first zone of ground water supply source must be established from outer water intake facilities (wells) of water intakes in the distance of 30 m while using secured ground waters; 50 m while using insufficiently secured ground waters. In our case, serviceable underground reservoir is secured, the interval of bedding is 430-480 m. Thus, first zone of sanitary protection, established for water supply wells of the KGF is 30 m.

334. In the territory of water supply wells zones of sanitary protection are established. The dimension of the zone of sanitary protection of the first area is 160х160 m. Underground ways for entrance of vehicles for the purpose of preventive measures for wells have been constructed. In the


territory of the zone of the first area lighting lamps have been installed, telephone communication has been arranged, watchman room has been provided.

335. Specific features of using water supply wells are that there are no polluting agents and wastes. The constant presence of the personnel while using water supply wells for the period of construction on the KGF is not provided (all equipment operates in automatic regime).

336. Water supply of the shift camp for construction supervision service is carried out by supplying soft water to reservoirs. Demineralization/desalting is carried out at automated water treatment plant with capacity of 30 m3/day. The quality of water in output complies with O’zDSt 950:2000 requirements. Demineralization/desalting method is preliminary treatment on filters and supply to reverse-osmosis membranes.

337. Water disposal for service and utility needs of the rural settlement is carried out by installing bacterial treatment plant “AS BIO 100” with further drain of refined flows to evaporation ponds. Considering unavailability of water, the supply of treated service and utility flows for irrigation and watering of the territory is provided.

338. Waste water of water treatment plant (saline liquids) is supplied to utilization (evaporation) to moisture-proof ponds.

339. Other sources of waste water formation in the territory of shift camp for construction supervision service are deemed to be absent. The consumption of water for construction needs refers to irrecoverable category.

340. The type and description of wastes, volume generated, level of hazard classification and disposal methods during shift camp operations are expected to generate, the formation of the following solid wastes are presented in the Table 44.

Table 44. Solid Waste and Disposal Method

Description of wastes Quantity, ton/annum

Class of hazard (1-5)*

Disposal method

Household wastes, food wastes 137,35 5 Transportation to household wastes area by dedicated agency.

Treated activated sludge 1,0 4 Use as mineral fertilizers for plantings upon approval by State sanitary-epidemiological expertise center

Solid precipitations (salted muds)

266,15 4 Transportation to household wastes area upon approval by Region Committee on environmental protection.

Mercury containing lamps 50 pcs. 1 Transportation for demercurization to Sitora. * 1 - Abnormally hazardous; 2 - High-hazardous; 3 - Moderately hazardous; 4 – Low-hazardous; 5 – Nontoxic. ** special place approved by the SCNP of the RUz for wastes utilization. *** organization, which specialized on wastes utilization, contracted by Operator.

341. Considering slight volumes of additional emission into the atmosphere while using of shift camp (all wastes and liquids belong to service and utility categories), development of special environmental protection measures is not required. Maximum possible reduction of impact by constructing treatment plants, as well as development of disposal scheme for all solid wastes is provided under project design.

342. Special insulators are provided for protection of birds on electric power transmission lines. For the purpose of reduction of failures of existing biotopes on the site, electric power transmission line has been laid along existing lines of communication on the KGF.

343. Upon completion of all construction of project’s infrastructure facilities the desert appearance will be area will havedconverted into finished town-looking appearance instead of desert appearance. A safe and convenient working conditions for construction personnel (which mostly will be employed from Bukhara region) will be created. Except that the transport infrastructure will be developed that to enhance social and economic condition in the region of project implementation.


344. The compulsory rehabilitation of the soil damage caused by construction works, plantings and drift-sand works are provided under the project.

345. There will be monitoring program for the construction and maintenance processes. The monitoring program will reveal and prevent potential negative impacts on the environment.

5.1.5 Impact on Desertification

346. The principal cause of the desertification process has been the improper and wasteful methods of irrigated agriculture in the region. As stated earlier, there is no active irrigated agriculture in the KGF Contract Area and little or no pasture use.

347. Recent studies have indicated that one way to combat desertification is to reduce the amount of irrigated agriculture in sensitive areas and replace people’s income from other sources. In this part of Uzbekistan a principal alternative source of economic growth is associated with oil and gas development. The KGF development (both construction and operation activities) will provide more than a thousand jobs to local people, and provide improvements to some local infrastructure such as roads and transmission lines. The PSA specifies that 80 % of jobs will be made available to Uzbekistan citizens, most of whom will come from the Bukhara region. The Operator prefers to employ people from the Karakul and Alat areas to reduce transportation and relocation costs. Further, the Operator is committed to developing and implementing a Social Policy to Support Local Communities.

348. In terms of water use, the KGF development will use shallow-well saline water that has no irrigation or potable water use for drilling. Other technical water and potable water will be used as described in Table 42 above, with the large majority of water being recycled.

Picture 30. Sand control Measures

349. Taking into account that Karakul Reserve is located outside Kandym group of fields and that all routes (automobile roads and railway) will go outside its boundaries (detour) there is significantly low possibility of having cumulative impact on Karakul Reserve.

The anti-desertification program which is already in place contributes to this effort of sand fixation. Picture 30 shows sand control measures near an initial well operation at Kandym.

350. With these measures in place, the impact of the Project on desertification will be less than significant, and may actually support anti-desertification measures that the Government of RUz has proposed.

351. In order to prevent destruction of plants growing in the territory of KGPP, arrangement was made to publish and distribute among employees of Operator and subcontractors dedicated Instruction Booklets containing the list of endangered species of plants, which are under government protection, information about prohibition of their extraction and destruction, consequences of such actions and measures entailing violation of given requirements (see Attachment 4).

5.1.6 Potential Impact on Birds

352. Taking into account that in the territory of Kandym group of fields:

Picture 31. Birds in the Field Base (Khauzak-Shady)


- there are no natural areas of preferential protection and Karakul Reserve is located outside Kandym group of fields;

- there are no wetlands where birds inhabit and nest (distance from designed GPP to lake Solenoye is about 10 km, and to lake Dengizkul - more than 65 km);

there is no possibility of Kandym Project having direct negative impact on numbers and migration processes of birds.

Picture 32. Power lines with Special insulator to protect birds

353. Impact on birds may be caused by some disturbance resulting from construction works (noise impact caused by operating construction machinery), however it will be temporary. Besides experience of Khauzak – Shady field operation has shown that trees and bushes planted around the territory of Field Base, on the contrary, attract birds and provide them with favorable conditions for nesting (see Picture 31).

354. In order to minimize negative impact of KGF field facilities construction project on birds it is provided that power transmission lines will be equipped with special insulators (see Picture 32).

355. Besides in order to prevent extinction of birds and animals inhabiting the territory of KGF, Operator made dedicated Instruction Booklets containing the list of endangered, threatened and rare species, information about prohibition of hunting them, consequences of such actions (see Attachment 4).

356. Restoring vegetation and avoiding bird nesting areas and migratory routes (during Spring and Autumn), coupled with enhanced monitoring program and hunting/poaching control on staff, could be some of the main features of this Wildlife Conservation Program.

5.1.7 Potential Noise Impacts

357. For particular conditions of Kandym Group of Fields, characterized by considerable distance from populated areas and industrial enterprises, existing railway and motor transport infrastructure, level of noise impact is absolutely insignificant.


358. So taking into account that the nearest populated areas are 10 km (town Alat) and 15 km (town Karakul) away from the boundary of the Kandym group of fields and respectively 25 km and 30 km away from Kandym field itself and GPP, there is no possibility of potential noise impact on local population.

359. However it shall be noted that during operation of KGF surface facilities and railway branch, as well as during sand storms, noise level will increase considerably (up to tens of dB). At that natural noise level during sand storms is expected to be higher than technogenic noise level.

360. Noise impact on maintenance personnel and local population will be assessed in more detail in the next stage of EIA procedure – during development of Ecological Effect Assessment.

5.2 Social Impacts and Mitigation Measures 361. In the design process of the KGF development, the impact of implementation of this project on the socio-economic situation in the region was given special attention.

5.2.1 Impacts of Land Acquisition

362. The gathering stations occupy small land plots whereas the gas processing plant and some infrastructure facilities require larger areas. The locations of gathering stations, gas processing plants, gas pipelines, auxiliary objects will be specified during detail design of deposit development. Due to its location, the planned construction of the Kandym GPP is expected to entail limited or no involuntary resettlement (physical or economic displacement) impacts as compared to other alternatives.5

363. Prior to taking possession of each land area required for the facility scheduled for construction, LUOC pays compensation to the leaseholder. Compensation is based on the land area, land use and estimated “lost profits” during the period required by the Operator of the construction of the facility. Lost profit or income is profit, which the land user could have gotten, but did not, because its rights to the land were infringed due to withdrawal of land for construction of Project facilities. Lost profit compensation amount is defined by the land user/leaseholder itself with application of three-year average State purchase prices for produced output and volumes of produced output. This amount defined by the land user/leaseholder is agreed by the surveyors, taxation and statistical structures, and approved by district and then regional authorities. The approved amount of compensation for provisional acquisition shall be paid for three years as this is the estimated period for restoration of natural soil fertility. The average rate of compensation which is 889,445 soum per 1 ha/year (around 593 USD per 1 ha/year) was agreed with the leaseholders.

364. Land acquisition and withdrawal for wells, shift camp, electric power substations, and roads was performed in accordance with laws and resolutions of the government of the RUz. Operator acquires lands in time for facilities construction. By decrees of khokim of Karakul region and khokim of Bukhara region 245.26 ha of lands was allocated to the Operator (as of 31.12.2010). By these decrees compensation amounting to 420,351,671 soums was paid by the Operator to the Karakul forestry farm and Karakul co-operative farm for lands and 389,197 soums to the special account of State committee of lands cadastre. Upon completion of construction, the Operator will restore and transfer the lands to Karakul forestry farm and Karakul co-operative farm for sowing of wild grasses. Calculation of the amount of compensation is made in accordance with the Decree of the Cabinet of Ministers of the RUz. “on approval of Regulations on order of consideration of land disputes in the RUz ” No. 246 dtd. 25.05.1992 and is dependent on the land area and quantity of years of Facility construction. Additional information on land plots allocated to the Project and amount of compensation paid is provided in Table 45.

5 Construction of a main gas pipeline to the Mubarek GPP will pass arable lands of Alat and Karakul

district, cross republican level communications (railway, automobile roads, PTL, communication cables, etc.) and water courses (canals, irrigation collectors)


365. Future land acquisition will be carried out following national laws and regulations and using the Lukoil Resettlement Framework agreed with ADB.

366. Upon completion of construction, the Operator will undertake land reclamation and transfer the lands to Karakul forestry farm and Karakul co-operative farm for sowing of wild grasses. Land reclamation in the gas industry aims to recover the productivity and economic value of lands disturbed during construction and improvement of environmental conditions. The Project will implement reclamation of disturbed land in view of the following aspects: (1) agricultural - on lands allocated for temporary short-time use for the purpose of construction of line facilities; (2) nature conservation and sanitary and hygienic - on lands allocated for temporary short-time and long-term for the purpose of construction of line and area facilities; and (3) construction - on lands allocated for temporary long-term use for the purpose of construction of area facilities.

367. Agricultural land reclamation in case of construction of line facilities in all natural zones comprises their recovery by removing and then restoring the fertile soil layer and improvement by fertilizing so as to use them as arable land, for haymaking and as pasture area.

368. Nature conservation and sanitary and hygienic land reclamation in all natural zones in case of construction of area facilities comprises vegetation of areas near to sites and in case of construction of line facilities it comprises soil retention and improvement by sowing permanent grasses and fertilizing and retention using mechanical appliances in case of sandy soils.

369. Construction land reclamation on lands allocated for temporary long-term use comprises use of disturbed land for construction of facilities of various purposes (industrial and civil).

370. Reclamation is performed in two steps: technical and biological. The technical step of reclamation is intended for conservation of fertile soil layer. Biological reclamation implies restoration of soil fertility lost due to construction within the construction strip area affected by construction machinery and undergone other mechanical impact.

371. Based on requirements for reclamation of lands allocated for temporary use during construction of pipelines made of pipes of various diameter (up to 1,020 mm), land is to be recovered to the condition suitable for use.

372. Construction companies shall minimize time of use of lands allocated for temporary use and closely observe length rates and time of land reclamation.

373. The fertile soil layer shall be removed both in cold and warm season, while the layer shall be returned only during warm (frost-free) year season within a time period set by the agencies that allocate land plots for use in compliance with the project.

374. Land reclamation shall be included in the scope of work for erection of pipelines (flow lines, manifolds, main gas line etc.) and performed in the following sequence:

removal of the fertile soil layer for temporary pile; distribution of excessive mineral ground left after trench backfilling within the reclamation strip; removal of building material debris; return of ground from the temporary pile and uniform distribution thereof on reclamation area; land plowing and harrowing within the width of allocated strip; sowing of grass on pastures using seeds; recovery of fertility of farmlands.

375. Hand-over of reclaimed land to the land user shall be processed according to the established procedure and involve land users, construction company, local agricultural authorities which enforce land use practices.

376. All land reclamation work shall be performed strictly within the construction strip.


377. During removal, transportation, piling, and storage of the fertile soil layer measures need to be taken that prevent layer quality impairment (mixing with underlying rocks; contamination with process, domestic and other waste and effluents), consolidation, outwash, and wind erosion.

378. If the fertile layer storage in the temporary pile exceeds 3 months, pile surface shall be sown with rapid-growing grasses.

379. Nature conservation and sanitary and hygienic land reclamation in all natural zones in case of construction of area facilities comprises vegetation of areas near to sites and in case of construction of line facilities it comprises soil retention and improvement by sowing permanent grasses and fertilizing and retention using mechanical appliances in case of sandy soils.

380. When recovering disturbed lands in the desert zone during construction of area facilities, the biological reclamation of land around the site has nature conservation and sanitary and hygienic aspects that imply forestation. The first windbreak strip shall include four rows of trees with strip spacing of 15-20 m. The second strip (external) shall include five rows of sandbinding shrubs followed by a 30-meter strip retained by a binding material. A firebreak strip, inter-strip spacing and inter-row spacing also shall be retained by binding materials in combination with grass sowing.

381. For forestation there will be used trees, shrubs and grasses of local species based on their gas resistance. Grasses used should have a heavy root system for rapid grassing of disturbed surface.

382. Forestation on movable sand using chemical protection shall comprise planting of one-year plants including tall species of kandim and cherkez grown in nursery garden. Height of aerial portion of plants shall be at least 25 cm and length of subsurface portion shall be 45 cm.

383. Pre-planting procedure includes preparation of the root system and cutting of branchshoots. Plants shall be planted in February or early March in at least 40 cm depth on the downwind side of covering at distance of 10-25 cm thereto.

384. Land plots shall be reclaimed during construction and erection work and, if possible, no later than for one year after completion of work.


Table 45. Kandym Land Registry

№ Ground for lands

allotment District

Withdrawn from farmstead

lands

Total area of withdrawal (ha)

Permanent use (ha)

Temporary use (ha)

Destination (for which facilities

is allotted)

Cost of works (services) on

lands allotments

(soum)

Lost profits compensation amount to the land-user for

lands withdrawal (soum)

Amount of compensation to the

special account of state committee of lands and

cadastre for lands withdrawal (soum)

1 Khokim's Decision № 601 dated 24.06.2006г.

Karakul district, Bukhara region

Cooperative enterprise Karakul 19,70 8,70 11,00

Highway construction and wells repair work

387 000 9 019 206 71 662



Cooperative enterprise Karakul

2,00 2,00 industrial base 384 308 1 129 232

3 Khokim's Decision №131 dated 03.02.2007г.


Cooperative enterprise Karakul 0,20 0,20

checkpoint 350 650 94 080


Karakul district, Bukhara region Cooperative

enterprise Karakul 9,50 9,50 Binding and aggregate quarries

2 082 460 3 763 200



Cooperative enterprise Karakul 10,00 10,00 temporary road 836 706 3 394 760


Jandor district, Bukhara region

GosZemZapas (State Land Reserve)

9,00 9,00 aggregate quarry

454 478 7 056 000



Karakul state forest farm 5,50 0,36 5,14 Well № 1086 and

access road 9 018 394



Karakul state forest farm 9,10 0,72 8,38

Wells № 1088 and 1050 and access roads

23 471 477 12 550



Cooperative enterprise Karakul 2,00 2,00

Temporary storage of pipes 13 218 000

10

Khokim's Decision № 473 dated 31.08.2009г.


Cooperative enterprise Karakul; Karakul state forest farm

12,00 0,72 11,28

Wells № 321-2 and 1055 and access roads 20 914 440 12 550

11

Khokim's Decision № 18 dated 11.01.2009г



26,26 2,06 24,20

Construction of high voltage lines 10 and 35 kW

44 188 743



Karakul state forest farm 25,00 25,00 field base main

office 40 992 700


№ Ground for lands allotment

District Withdrawn

from farmstead lands

Total area of withdrawal (ha)

Permanent use (ha)

Temporary use (ha)

Destination (for which facilities

is allotted)

Cost of works (services) on

lands allotments

(soum)

Lost profits compensation amount to the land-user for

lands withdrawal (soum)

Amount of compensation to the

special account of state committee of lands and

cadastre for lands withdrawal (soum)

13

Khokim's Decision № 537 dated 12.10.2008г



26,00 2,16 23,84

water wells, access roads 26 270 552

14 Khokim's Decision № 194 dated 23.04.2010y


Karakul state forest farm 3,70 0,36 3,34 Well № 320-2 and

access road 9 870 063 98 700





26 149 682 26 149

16

Khokim's Decision № 187 dated 19.04.2010y



11,00 11,00

Temporary access roads to water wells 14 214 313




Wells № 324-2 and 1036 and access roads

19 745 678 19 746





21 346 679 21 347




Wells № 215-2 and 1032 and access roads

15 433 010 15 433




Wells № 243-2 and 245-2 and access roads

19 814 323 19 814





16 783 183 16 783

22

Khokim's Decision № 673 dated 22.11.2010y



Wells № 1027, 1035, 1041, 1048 and 1079 and access roads

74 463 956 74 463

Total: 245,26 21,40 223,86 4 495 602,00 420 351 671,00 389 197,00


5.2.2 Impacts on Employment and Local Development

385. The Production Sharing Agreement (PSA) clause 6.2.(b) provides that LUOC may engage 20% of foreign employees and 80% of citizens of the Republic of Uzbekistan (hereafter – RUz) from average annual quantity. Employment generated by the Project will create a large number of jobs for the citizens of Bukhara region and other neighboring provinces. The Operator prefers to employ people from the Karakul and Alat area to reduce transportation and relocation costs. Hence the Project is expected to have a positive impact on the economy at the regional and national level.

386. During drilling operations, LUOC will hire 23 personnel per shift while the contractors’ personnel are expected to be around 100 per shift. The drilling of the first 42 wells provided jobs to approximately 200 people hired by the drilling contractor. During construction phase, it is estimated that approximately 9300 people comprised of 4000 (per shift) contractors’ personnel and 650 (per shift) LUOC staff will be employed over a period of 3 years. It should be noted that the estimates in Table 46 below is maximum quantity of work force required during each phase.

Table 46. Estimated Workforce during Drilling, Construction and Production Phases

Drilling operations 2010-2013

Construction Phase 2014-2016

Production Phase 2017 – 2018

Production Phase 2019 –

Operator’ Personal total, 46 1300 1999 1999 Skilled 46 1300 1975 1975 Unskilled 0 0 24 24 Contractor’ Personal total, 200 8000 3500 500 Skilled 190 6000 2500 350 Unskilled 10 2000 1000 150 Grand Total 246 9300 5499 2499 Notes: These are estimates not commitments and relate to all components of the project. Also, due to the shifting scheme to be applied,

the number of continuously working personnel in the field will be about 50% less than mentioned in this table.

387. During production phase, LUOC plans to hire about 2000 people, about 200 of them are foreign personnel. As Kandym gas processing complex is located in the desert, it assumed that work will be performed on a rotational basis, by schedule (2 working weeks/2 weeks of rest between shifts, or 1 working month/1 month of rest between shifts). It means that personnel will work and live in shift camp constructed at KGPC for 2 weeks/1 month , and then personnel will go to the place of permanent residence (in the territory of RUz, CIS, etc) for 2 weeks/1 month.

388. Foreign specialists will be mostly hired in Russia and other CIS countries. In accordance with local legislation of RUz work permit shall be obtained for them. As all other employees they will work on a rotational basis and during their work shift they will live in shift camp and for the period of rest between shifts they will return to the place of permanent residence (outside RUz).

389. The KGF development will also provide improvements to some local infrastructure such as roads. Further, the Operator is committed to developing and implementing a Social Policy to Support Local Communities.

390. Unmet Community Expectations for Jobs. It has been planned that the major part of the staff will be recruited from the local residents. However, due to lack of suitable and qualified of local candidates, there is a risk that expectations by the community for jobs will not be met.

391. Vacant positions shall be advertised in mass media (including television, Internet, radio), cooperation with educational institutions specializing in professional trend of activity is effected, lists of vacant positions are submitted to local state employment authorities. Interviews will be held in LUOC Bukhara office. Taking into account that nearby districts (Alat, Karakul, Gazli) cannot completely provide LUOC with workforce personnel will be recruited in the whole territory of the Republic of Uzbekistan. Lack of work force is first of all related to presence in this district of some large oil and gas production and processing enterprises.


392. During its periodic consultation with the community, LUOC will also inform the community of availability of jobs and business opportunities. Contractors will implement a local hiring plan in accordance with the PSA which requires them to hire 80% of workers from the local population.

393. LUOC plans to provide charity assistance to the Bukhara Oil/gas College in order to build up its equipment level to promote training of specialists. Being a responsible company, in the design process the Operator planned to provide and currently is providing charity and sponsorship assistance starting with individual charity actions and ending with long-term sponsorship activities in the field of education, culture and sports. While distributing the charity and sponsorship assistance specific attention is paid to particularly vulnerable groups of the population. LUOC also plans to invest in skills training to enable LUOC local personnel to take on more specialized jobs throughout Project life. Such training will start as early as possible ensuring maximum employment during construction and operations.

394. Risk of poor labor and working conditions especially during Construction. There is no risk that construction workers and operational employees will have unsafe and/or non-compliant worker accommodations, and a lack of rights to collective bargaining and dispute resolution. LUOC has the policy and monitoring mechanisms in place to ensure that contractors workers and LUOC staff have safe working conditions and their workers’ rights respected.

395. Moreover, except for Convention 87 on freedom of association, Uzbekistan has ratified 7 out of the 8 conventions including the right to collective bargaining. By providing labor conditions and worker rights that adhere to Uzbekistan labor laws and international standards, and providing added value investment in training, employee healthcare, the Project has the potential to show leadership at a local, regional and national level which could impact the quality of life for workers. Mitigation measures include clear communication to contractors regarding standards, laws and regulations; establishing compliance assurance procedures for camps (e.g. audits, sanitary standards, etc.); and contractor performance evaluations on worker welfare and establishing penalties for non-compliance.

396. LUOC complies with labor law which prohibits discrimination based on race, gender, ethnicity or religion. In the LUOC head office, 25% of managerial position or 12 out of 40 departments are headed by women. These include the chief accountant and managers of financial department, ecology department, human resources, transportation department, among others.

397. In the field, the 2 heads of the laboratory in Khauzak are women. In the Kandym field, most of the LUOC construction supervision staff are men and drilling contractors workers are men due to the harsh desert environment. Moreover, the shift rotation working arrangement requires workers to work for extended period of time (2 weeks to 1 month), therefore, not appealing to women who usually do not want to stay for extended period of time away from their family and chilldren.

398. If there are women at the shift camps, separate facilities and accommodations are provided for them. This is required by law with or without women working at the shift camps. Moreover, the strict camp habitation rules and regulations issued by LUOC to all their staff and contractors’ personnel staying in shift camps require residents to follow a code of conduct and public order rules. All LUOC shift camps are “dry” camps with zero tolerance for alcohol, drugs or any forms of substance that affect the behavior and capacity of personnel.

399. Benefits enjoyed by women as provided by law and implemented by LUOC include paid sick leave when taking care a of sick child and when a woman delivers a child, she is entitled to maternity leave upto 2 years and provided (i) an average salary for 4 months; (ii) one time bonus (equivalent to USD200) and 2 years material assistance for child care.

400. ADB’s Social Protection Strategy 2001 requires the Operator to comply with applicable labor laws in relation to the Project, and to take measures to comply with the core labor standards6 for the

6 The core labor standards are the elimination of all forms of forced or compulsory labor; the abolition of child labor;

elimination of discrimination in respect of employment and occupation; and freedom of association and the effective recognition of the right to collective bargaining, as per the relevant conventions of the International Labor Organization.


ADB financed portion of the Project. Notwithstanding LUOC’s demonstrated performance to provide safe working conditions and respect workers’ rights, LUOC commits to continue to take the following measures to comply with ADB’s social protection requirements:

(a) carry out its activities consistent with the intent of ensuring legally permissible equal opportunity, fair treatment and non discrimination in relation to recruitment and hiring, compensation, working conditions and terms of employment for its workers (including prohibiting any form of discrimination against women during hiring and providing equal work for equal pay for men and women engaged by LUOC);

(b) not restrict its workers from developing a legally permissible means of expressing their grievances and protecting their rights regarding working conditions and terms of employment;

(c) engage contractors and other providers of goods and services: (i) who do not employ child labor7 or forced labor8;

(ii) who have appropriate management systems that will allow them to operate in a manner which is consistent with the intent of (A) ensuring legally permissible equal opportunity and fair treatment and non discrimination for their workers, and (B) not restricting their workers from developing a legally permissible means of expressing their grievances and protecting their rights regarding working conditions and terms of employment; and

(iii) whose subcontracts contain provisions which are consistent with paragraphs (i) and (ii) above.

401. Community Health and Safety Impacts (Construction Phase). During the peak of construction vehicle traffic, particularly heavy trucks, will increase as a direct result of the Project construction. This increase in heavy truck traffic presents a risk of accidents that could result in anything from minor injury to serious injury or death. Injury or death from traffic impacts is a direct negative impact that will be localised and long term, occurring during both construction and operational phases, but which can be mitigated to reduce the likelihood and severity of incidents. The Operator shall maintain an emergency response team that will be mobilized to address emergency situations.

402. The presence of construction workers at the project sites which are located far from settlement population is not expected to cause any social conflict, adverse impacts on women or girls. The risk of introducing and spreading communicable and sexually transmitted diseases is not anticipated as there are no nearby communities. Construction workers and shift personnel are not permitted to leave the camp while on shift and are expected to follow the strict camp habitation and public order rules.

403. A health, safety and security plan covering traffic management, security checks, and regular medical check-ups of personnel will address potential community health and safety impacts. Additional health and safety training and awareness programs will be needed for KGF workers (though far, workers may unavoidable travel to and interact with the community) during construction phase (esp during roads and railway construction) and after the facilities start operation. HIV and STD prevention programs will be added to KGF workers' manual, with regular check-ups. Communities will be briefed on health and safety issues and community clinic services provided as part of the LUOC social support to communities.

7 Child labor means the employment of children whose age is below the statutory minimum age of employment in the

relevant country, or employment of children in contravention of International Labor Organization Convention No. 138 ‘Minimum Age Convention” (www.ilo.org).

8 Forced labor means all work or services not voluntarily performed, that is, extracted from individuals under threat of force or penalty.


5.3 Cumulative and Induced Impacts 404. Cumulative Impacts. The cumulative impacts of the proposed KGF Development by LUKOIL were assessed covering a temporal dimension of year 2014 to 2039 (from the expected year of start operations to the time KGF ends operation under the PSA) and a geographic/spatial dimension based on the area that expects to have potential physical influences from the KGF and likely developments that could generate and/or receive cumulative effects.

405. It has been confirmed that the project and adjacent areas are dry, low-hilled plains with prevalent desertification effects of drifting sand and no history of irrigation. While there is no river in the central desert area of Bukhara region where KGF is located, the nearest water bodies are the Amudarya River (25 km away from the GPP development) and Solenoye Lake (10km away). Cumulative effects to surface water and groundwater are assessed to be insignificant to non-existent, considering water is fully recycled in KGF and no water will be returned to surface or groundwater. Ground water will be used for preparation of drilling mud, not water from surface water bodies (not from irrigation sources). Water quality monitoring stations set up by State Committee for Nature Protection will be useful to reconfirm the assessment results.

406. Additionally, there is no development existing or planned in the vicinity of the main KGF development, and the nearest population settlement (Alat and Karakul) is 30-45 km away. The following facilities are at a distance of least 50 km: Gazil deposit, oil refinery, and Kauzak-Shady gas field. Thus, considering the air quality assessment conclusion described in the EIA that the concentration of indicative air pollutants such as sulfur dioxide are way below permissible statutory standards immediately outside "sanitary protection zones" of the development, the entire air shed can anticipate minimal air quality cumulative impacts since there is virtually no development contributing to it. The atmospheric pollution potential is expected to be lower than 2.5 (medium-low) mainly because of the occasional (natural) dust concentration during windy hours. Regular monitoring stations and reporting, jointly set up by SCNP and Operator, additional to those committed to by Project EMP, will be necessary to continuously verify this situation.

407. The only area of potential ecological concern is the Karakul Nature Reserve (2.5km away) established in 1971 mainly to study the fixation of mobile sand dunes to protect irrigation systems from sand encroachment. An additional purpose was to restore the fauna and flora of the southern Kyzylkum desert, especially the Goitered Gazelle and migratory waterfowl.9 Taking into account that Karakul Reserve is located outside Kandym group of fields, and all routes (automobile road and railway) will go outside its boundaries (detour) there is significantly low possibility of having cumulative impact on Karakul Reserve. The anti-desertification program which is already in place contributes to this effort of sand fixation. Awareness enhancement training among workers over the years will also be conducted, to share the work of nature conservation measures and assign personal responsibilities. Restoring vegetation and avoiding bird nesting areas and migratory routes (during Spring and Autumn), coupled with enhanced monitoring program, could be some of the main features of this Wildlife Conservation Program.

408. Additional health and safety training and awareness programs will be needed for both the KGF workers and the community after the facilities start operation and the potential cumulative effects become apparent. Regular drills and area-wide emergency response programs will be in place to prevent and minimize the risks on safety. HIV and STD prevention programs will be added to KGF workers' manual, with regular check-ups and community clinic services. These have been included in the Project EMP but may be expanded over years as needed. Cumulative effects on local employment and economic benefits are anticipated to be moderate, as the field workers mainly consume within the Contract Area but spill-over effects are unavoidable.

409. Greenhouse gases emission is anticipated to increase by approximately 1.2 million tons of CO2 equivalent per year as estimated by NCASI methods, but should stabilize after full operation of




KGF and near-by communities and associated facilities, such as railway and roads, fully develop. But the GHG impacts are global (not cumulative/local) its contribution from all facilities and developments is cumulative, and can be reduced by choices of technologies, in separation in well production, tail gas reduction, together with potential GHG capturing and sequestration.

410. Overall, the cumulative impacts are assessed to be minor and manageable, and with capacity building emphasis and joint monitoring program with the SCNP, mitigation measures can be reasonably implemented as long as budget and staff resources are available, from both KGF and the local and State authorities.

411. Induced Impacts. The KGF area is located in an arid desert area and in close proximity to the border. Due to this unique location, “camp followers” and non-worker communities are not expected. The national legislation requires residents to register in a specific area of permanent residence. This registration requirement restricts the mobility of workers as transferring of registration from one permanent place of residence to another is a difficult and bureaucratic process. Moreover, policies and procedures on camp management and security protocols restrict the workers from bringing in non-resident and non-worker personnel. For these reasons influx of population to the Contract Area is highly unlikely. Based on experience at Khauzak-Shady, LUOC is not aware of influx occurring at Khauzak-Shady.

412. With respect to migration, the trend in Karakul and Alat district as described in the social analysis section is that of migration to other parts of the country and to other countries in search of employment opportunities among other reasons. It is very unlikely for workers from other provinces to settle permanently in Alat and Karakul district. It is also unlikely for workers coming from other provinces to bring their family and rent their own apartment in the nearby settlements as this will entail additional costs in addition to having to go through the bureaucratic registration process. Contractors are required to provide living accommodations for their workers in accordance with national regulations. With respect to LUOC staff during operations phase, LUOC shift personnel are transported to their permanent places of residence at the cost of LUOC. Overall, induced population impacts at Kandym is not expected.

5.4 Impact Summary of Mitigating Measures 413. Impact Significance. Environmental and social impact significance can be determined on the basis of an impact’s magnitude, duration, and compliance with accepted standards. Application of the appropriate mitigation as described in this EIA and EMP aims to reduce significant negative impacts to a less-than-significant level. If reasonable mitigation cannot sufficiently reduce the negative impact’s significance the EIA reports that the impact remains after mitigation and is significant.

414. Magnitude of impact. An impact can be characterized by its magnitude:

Minor: environmental impacts characterized by no or small, potentially measurable change; for social impacts, no or small adverse changes and more beneficial potentially measurable impacts; standard siting, construction/operational norms and standards and practices can address such impacts.

Moderate: environmental impacts include measurable loss or system disruption, system able to continue without mitigation but a lower level; social impacts: measurable socio-economic changes, but individuals and communities would be able to function quite well but at a different level; standard siting, construction norms and standards and practices to take care of these impacts, but some mitigation measures may also be required

Severe: environmental impacts consist of substantial or major losses or system disruptions; systems unable to function without considerable mitigation or major compensation; social impacts: substantial changes to existing conditions or major socio-economic loss or disruption; individuals and communities unable to function traditionally without mitigation or


major compensation; alternatives to the proposed action have to be considered and a well-budgeted EMP needed with strict monitoring and capacity strengthening.

415. Duration. An impact can be of short duration (for example noise during construction only), or long lasting or permanent such as the taking of private lands for the project, or destroying an ecologically important area. Long lasting or permanent impacts are generally significant. For example, an impact that is minor in magnitude but permanent in nature may be classified as significant. An irreversible impact will also normally be significant.

416. Compliance with Standards. A project causes a significant impact if it does not comply with accepted norms, such as air, noise or water quality numerical standards, requirements of accepted RUz standards, or other standards accepted for the impact assessment such as ADB, WHO or European environmental standards.

417. A summary of the potential environmental and social impacts and possible mitigation during the project construction, operation and decommission periods are shown in Table 47. More detailed mitigation measures will be specified at the Ecological Effect Assessment (EEA) stage.

418. Operator’s Director General is in charge of implementation of all measures specified for implementation of Kandym Group of Fields field facilities construction project (including those given in Table 47).


Table 47. Environmental Management Plan

Potential Impact Impact Areas Impact Duration and

Period Impact Significance Required Mitigation Measures

Potential Residual Impacts

Construction Phase Physiochemical Noise and vibration due to construction and transportation

Construction areas; movement of vehicles, drilling areas, excavation, road an railroad construction activities

During the construction

Potential minor negative impact in populated areas, can be mitigated

Adopting RUz and International standards on occupational health and safety as well as noise minimization program. Acceptable noise levels to be specified.

No Significant Impact

Air Pollution; dust due to the construction and transportation and high level, nitrogen oxides, hydrogen disulfide, ammonia, xylol, methyl benzene are of natural origin.

Construction areas and populated areas near the road

During the construction and transportation

Potential minor negative impact, can be mitigated

Develop site management program prior the construction. Maximum use of existing roads. Good compacting and runoff design, observe speed limits, develop watering schedule for all roads. Develop appropriate monitoring program for the other natural air pollutants in the area.


Water Pollution; soil erosion Construction areas,

During the construction and operation


Develop best management practice consistent with Operator’s policy on soil erosion at all constructed areas as well as pollution control technique. Domestic sewage generated by workers are collected in the septic tanks. Develop appropriate monitoring program for water quality (surface and groundwater and wastewater/effluents).


Handling and Storage of Fuel and Explosive materials

Construction areas Temporary/ During the construction


Develop specific policy, safety, emergency response and SOP which comply to Operator’s international standards, install oils and grease aggregators and separators and appropriate storage facilities.


Disposal of earth, rock spoils, including drilling wastewater and muds

Construction areas and dump sites

Temporary/ During the construction


Identify earth, rock, and drilling mud disposal sites and develop best practice management program.


Solid wastes Construction sites and workers camps

Temporary/ During the construction


Using or constructing approved-offsite disposal facilities in coordination with local authorities and develop/enforce a solid and hazardous waste management program.


Biological Terrestrial Vegetation loss Location of project Entire project life Potential minor Setting replanting program with appropriate plants (saxsaul, No Significant





and wild life

infrastructure, railroad, access roads.

negative impact can be mitigated

etc.) and wildlife life conservation program (see Picture 31 and Attachment № 4).

Impact

Reduced bird migration Entire KGF and nearby lakes and wetlands

During the construction Potential major negative impact can be mitigated

Avoid construction or other activities in the Karakul Reserve and other sensitive sites, such as nesting areas. Provide special insulators on electrical power lines to protect raptors (see Picture 32).


Contribution to desertification process

Entire KGF, particularly in areas to be used for

Mainly during construction, but including entire project life

Potential minor negative impact can be mitigated

Extend shifting sand prevention program being carried out in Karakul reserve to infrastructure areas in the KGF (see Picture 30). Reduce consumption and recycle water. Re-establish vegetation in all construction areas.


Endangered species KGF Area During the construction Potential minor negative impact can be mitigated

Initial flora and fauna assessment indicated absence of endangered species but stil monitoring activities will be carried out. If found, cooperate with authorities to develop and implement a specific protection plan. Provide workers with information on endangered species (see Attachment № 4).


Human (Health and Safety) Communicable, sexual transmitted disease due to influx workers, project employees

Project area During the construction


Establishing Health, Safety and Environmental Plan and health care system to prevent, control and provide medical treatment for workers. Screening and medical surveys of all employees before engagement. Provide education on health and hygienic. Working closely with local health authorities.


Safety hazards for workers and project employees at work places, and residents in populated areas near road and railroad

Workers, project employees, and affected populated areas (near road and railroad)

During the construction


Develop or adopt the international best practices on occupational Health and safety at the work place and Emergency Response Plan to address emergency situations within the gas processing plant (in Operator’s EMP and Health, Safety and Environment Plan, compliant with Operator policy and ISO 14001 and OHSAS 18001).


Social and Economics Employment opportunities Project areas, and

surrounding populated During construction Potential major

positive impacts PSA requires 80% of LUOC and contractors staff to come from local population.

Positive Impact





areas Compliance with national laws and core labor standards. Unmet community expectations on jobs

Project areas, and surrounding populated areas

During construction Potential minor negative impacts

Timely communication of employment estimates, timeframes and skills requirements to the community Investment in skills training. Development of Social Policy to Support Local Communities.


Involuntary Resettlement (IR) Project areas, and surrounding populated areas

Prior to construction period with potential IR impact


Prepare and implement a resettlement plan (RP) as per resettlement framework agreed with ADB.

No Significant Impact, with RP

Aesthetic and cultural Landscape and visual impacts

KGF and constructed areas

Entire project life Potential minor negative impact can be mitigated

Development will include good living conditions, fenced areas and no uncontrolled dump sites. Project footprint to be as compact as possible.


Archeological KGF and constructed

areas During the construction Potential minor

negative impact can be mitigated

No archeological objects found during initial Environmental Audit. If any objects are found during construction period, activities at specific site will stop and consultation will be held with relevant government authority, for direction how to proceed.


Operations Phase

Surface Water Water Quality KGF Area Entire project life No Impact

anticipated No water returned to surface water courses. Water treatment and wastewater treatment plants coming from shift camps and the gas processing plant will be provided.


Water Balance KGF Area Entire project life Potential minor negative impact can be mitigated

Ground water will be used for preparation of drilling mud, not water from surface water bodies (not from irrigation sources). Water will be recycled as appropriate.


Existing Use KGF Area Entire project life Potential minor positive impact

Project will provide employment and economic base alternative to current wasteful irrigated agriculture.

Positive Impact

Biological/Ecological Impacts to bird migration KGF Area Entire project life

without mitigation Potential major negative impact that can be mitigated

Avoid construction or other activities in the Karakul Reserve and other sensitive sites, such as nesting areas. Provide special insulators on electrical power lines to protect raptors (see Picture 32)..


Impact to local flora and fauna

KGF Area Entire project life Potential minor negative impact

Setting replanting program with appropriate plants (saxsaul, etc.) and wildlife life conservation program (see Picture 31 and






can be mitigated Attachment №4).

Human Landscape and visual impacts

KGF and constructed areas

Entire project life Potential minor negative impact can be mitigated

Development will include good living conditions, fenced areas and no uncontrolled dump sites. Project footprint to be as compact as possible.


Social and Economics Creation of long term high quality jobs


During operations Potential major positive impacts

PSA requires 80% of LUOC and contractors staff to come from local population. Work with local vocational training schools to develop curricula which will qualify local students to better meet the needs of the gas production industry Compliance with national laws and core labor standards.

Positive Impact

Reduction in workforce during transition from construction to operations phase


During operations Potential minor negative impacts

Timely communication on contract termination. Skills and experience gained help workers find job opportunities in other gas projects in the region.


Decommissioning Phase*

Physiochemical Surface Water

Water Balance KGF Area After decommissioning Potential minor positive impact

Consumption of water will cease. Positive Impact

Noise Increasing traffic level Project areas and nearby

villagers During decommissioning

Potential minor Negative impact

Adopting International standards on occupational Health and safety as well as noise minimization program.


Blasting and removing concrete infrastructure

KGF Area During decommissioning


Blasting may affect bird migration if done at improper times. No Significant Impact

Air quality Increasing dust and air emission level due to the truck movements, removing infrastructure

Project areas and nearby villagers

During decommissioning


Develop site management program for dust suppression prior to decommissioning.


Biological/Ecological Bird migration KGF Area After decommissioning Potential minor

positive impact Restore bird ability to move freely through the Contract Area. Short-term negative impacts possible during infrastructure

Positive Impact





removal until natural conditions are restored. Terrestrial vegetation and wildlife

Project areas After the project decommissioning

Potential Minor Positive Impact

Restore original plant communities. Short-term negative impacts possible during infrastructure removal until natural conditions are restored.

Positive Impact

Endangered species KGF Area After the project decommissioning

No Impact Anticipated


Human Employment Project areas and nearby

villages During decommissioning


Creating work and job opportunity. Positive Impact

Employment Project areas and nearby villages

After the project decommissioning

Potential Minor Negative Impact

Timely provision of information on contract termination; Reassignment/realignment of personnel. Provision for separation package of benefits for permanent LUOC employees as provided by law.


Landscape KGF Area After the project decommissioning


Restore/rehabilitate visual landscape. Positive Impact

* In accordance with the requirements specified by legislation of the Republic of Uzbekistan (in particular «Regulation on State Ecological Expertise (SEE) in the Republic of Uzbekistan», approved by Decree of the Cabinet of Ministers No491 dated 31.12.2001) the potential environmental impact in the decommissioning stage of KGF will be assessed in detail within the framework of individual project – Ecological Effect Assessment, which shall be developed by Operator in 2039 (termination of PSA validity period).


6. Analysis of alternatives

6.1 Selection of preferred alternative 419. National Holding Company (NHC) “Uzbekneftegaz” and other companies including private investors are interested in mining hydrocarbons at a minimum expense of capital and labor. That is why, when selecting location of exploration, probable and discovered reserves, field remoteness from transport communications and processing centers, depth of productive horizons occurrence, well debit, environment and other factors determining labor input and material resources required for hydrocarbons exploration, mining and transportation are taken into account.

420. Thus, oil and gas mining enterprise location depends on location of natural resources and ancillary conditions.

421. Notice, that industrial operation of hydrocarbon fields is divided into three stages:

- Period of increasing production during development drilling;

- Period of stabilized maximum annual production;

- Final period of decreasing (annually) production due to formation energy exhaustion and gradual field reserves mining.

422. Total term of field development varies within 20 and 30 years (sometimes more which is connected with the profile of gas resource and the exploitation technology used).

423. It has taken a long time to develop the KGF because of its remote geographic position which is in hardly accessible zone at a big distance from processing points and raw material realization (Mubarek GPP), presence of high sulfur gas and absence of developed transport and social infrastructure.

424. In RUZ the degree of maturity of many of its fields has reached 50% and more, terms of operation without compressors has come to the end, and difficulties associated with achieved high level of natural gas production in the present fields has becoming to appear.

425. From rational use of mineral wealth point of view, taking into account big reserves, it is necessary to renew industrial development of Kandym field for RUz.

426. Start of project implementation on the KGF commissioning can been achieved by means of attracting foreign investment from international partners as well as utilization of achievements of international technology, science and best practice in field of gas development and environmental management. Character of planned activity is determined by cooperation with the concerned foreign companies. Means necessary for technical solutions realization in accordance with technological design of development are also mutual between NHC and foreign partner.

427. Technological design of development considers development options with wells location in triangular network with distance between them of 1250, 1500, 1750 and 2000m, from which most preferable option is a network with distance between wells of 2000m. Cluster (multiple/group) drilling is possible. Optimal number of wells is calculated for each network density, for each well network 3 options are considered with differing levels of gas production and initial working well debits. Kandym field options are characterized by different levels of gas production (4.5, 6.0 and 8.0bln. m3/yr, corresponding to 3, 4 and 5 % of gas reserves).

428. Due to different possible options and uncertainty around them it was decided to carry out risk assessment for further economic-statistic analysis. Main risks existing under project implementation are:

- Risk of not confirming the productivity of the KGF because of poor information about central part of the field (lack of well testing).

- Risk resulting from insufficient knowledge of satellites.


429. These risks do not have any fines as possible consequence, as they both are not deriving from Investor’s activities. In case of these risks not achievement of planned production level is possible, that means availability of unequipped capacity and decreasing of Investors profit.

430. After risk assessment, feasibility study and environmental assessment it can be said that most optimal design for KGF is drilling over a network with distance between wells of 2000m with planned level of gas production 8bln.m3/yr including production of 2bln.m3/yr from fields-satellites starting from the fifth year of development of the main field Kandym. Such design solutions population gives maximum technical-economic efficiency and environmental safety of Kandym group of deposits development. The proposed optimal number of project wells location and number (126 units) is dictated mainly by geological conditions.

431. Taking into account that works are performed using modern technology and drilling technique, with duly developed mud solution program of low danger class (4th class), conclusion can be made about absence of extreme impact on environment and significant improvement of social-economic conditions in the region (due to development of transport and social infrastructure; increased employment; increased level of education and medical services of local population, etc.).

6.2 No action alternative 432. The “no action alternative” or no drilling and further development of Kandym group of deposits is not attractive both to entire economy and the oil and gas sector of Uzbekistan. It would lead to lower employment and lower foreign exchange earning and lower GDP Analysis of possible options shows that by adopting established design solutions there will be a low level of environmental impact which will be mitigated to the extent possible. .

433. Notice, that many technical and technologic solutions are similar for all deposits, for instance, regarding well drilling, well arrangement, product collection systems and gas gathering stations, gathering mains, automation, communication, internal power supply, etc.

434. Kandym field (without satellites) where main resources of hydrocarbons and sulfur are concentrated is considered as basic field in all KGF.

435. Kandym, which gas contains hydrogen disulfide, additional processes are necessary for gas desulfurization and sulfur production organization.

436. Technological design of Kandym group of deposits is prepared taking into account of mineral wealth protection and natural resources rational use. Design solutions meet modern environmental requirements and will facilitate full and timely use of hydrocarbon reserves with maximum conservation.

437. Currently in the territory of the RUz the recent years of geological exploration have not lead to discovery of new large gas-condensate deposit. The “no action alternative” or refusal from planned activity for KGF is not tenable for the state. It can be stated that no viable alternative to the KGF development exists.

438. Production objects will be located in desert zone far from settlements, on territory which was not subject before to significant technogenic impact.

439. Gathering stations occupy small land plots. Largest territory will be occupied by gas processing plant and some infrastructure facilities. Location of gathering stations, gas processing plants, gas pipelines, auxiliary objects will be specified during detail design of deposit development with account of ecological safety of the region.

440. GPP site is planned with regard to expense minimization for construction of interfiled fed collectors, power transmission line (PTL), automobile roads, railway spur, water supply pipeline and min commercial gas pipeline. Under modern methods of deposit development level of possible environment pollution should not exceed maximum allowable concentrations.


6.3 Alternative to Kandym GPP 441. Alternative to Kandym GPP could be transportation of high sulfurous gas to Mubarek GPP with construction of main gas pipeline. But gas pipeline should pass arable lands of Alat and Karakul district, cross republican level communications (railway, automobile roads, PTL, communication cables, etc.) and water courses (canals, irrigation collectors). It worthy to note, that Mubarek GPP is located in the region with unfavorable ecological situation (more polluted atmospheric air, insufficient treated water facilities). Thus, this option would be beneficial to the Karakul district from an environmental perspective, but not from a socio-economic view. Similarly it would compound environmental problems at Mubarek.

442. Option of gas containing hydrogen disulfide transportation for big distance crossing agricultural lands and engineering structures (railway, automobile roads, etc.) to Mubarek GPP for processing on reconstructed capacities is unsafe and not rational.

6.4 Selection of Final Alternatives 443. During the detailed design phase, locations of production facilities are to be determined on the basis of detailed survey work and engineering and geological studies, as well as the final composition of the designed engineering facilities, which will be the subject of environmental studies at later stages of the EIA procedure. The next (last) stage of the EIA procedure is the development of the Ecological Effect Assessment (EEA) for the surface facilities of KGF, including all of its infrastructure facilities and GPP complex.

444. EEA is the final stage of the EIA procedure and is performed at the stage of development of engineering documentation for the facilities. At EEA stage, when detailed design solutions for each facility are developed, environmental regulations (norms of environmental impact) for all projected facilities shall be developed. Environmental regulations include standards for maximum allowable emissions into the atmosphere, permit for special water use, the maximum allowable discharges into water bodies and / or on the surface, the standards of wastes generation and the limits of production and domestic wastes disposal.

445. Moreover, at this stage, the measures on reduction of adverse environmental impact are specified (within established environmental norms); environmental monitoring program is being specified with the substantiation of the observation network.

446. Developed EEA shall pass State Environmental Expertise in the SCNP of the RUz, a positive conclusion of which is required as a regulatory permit for starting of facilities operation.


7. Disclosure, consultations and participation

7.1 Project Design and Preparation 447. During project design and preparation period, the Operator approached the chiefs of Khokimiyat of Karakul, Alat and Jondor Districts in Bukhara Region and informed them about the planned consultations with various stakeholders whose interests will be affected by the KGF development Project. Through the Khokimiyats concerned organizations and citizens, including elders of mahallas and corporate farms were invited to attend various consultation meetings. It is important to note that the nearest populated areas to the project implementation site are more than 40 km away.

448. Thirty-three meetings were held during the period 2008 and 2009, attended by chiefs of Khokimyats, representatives of regional financial, environmental and social agencies, owners of farm enterprises located on or near the Contract Area. During these consultation meetings, the stakeholders were informed about the preparatory works being done for KGF development project, the performance of design and exploration work and the need to allocate land allocation for various Project infrastructure facilities. In this connection during consultations mostly issues related to land allocation and major aspects of planned Operator’s activity were discussed.

449. The purpose of the meetings was to discuss the implementation of gas processing plant (GPP) construction and associated infrastructure development project. During the meeting, the representatives of Operator made a presentation on the proposed project and the offered prospects, as well as the program of activities aimed at mitigation of possible negative consequences for the local population.

450. In the course of the presentation, issues concerning land allocation, procedures for processing of appeals and suggestions, and a number of issues concerning the regional ecological impact of the project were discussed. The prospects of improving social and economic status of the region as a result of a successful project implementation were also addressed. Besides, during the meetings the information was provided on projects (including social and charitable), which have been implemented and are planned for implementation in the Republic of Uzbekistan.

451. In 2010, addtional consultation meetings were arranged by the Operator in Karakul, Alat and Jondor districts. These meetings were attended by heads of local authorities, representatives of financial, ecological and social regional services, and farm owners economically interested in lands to be used for project implementation (46 persons). Meetings were attended by the same representatives of local authorities and various regional services, and representatives of local population participated in several meetings. Majority of the participants who attended the meetings were men since out of the 46 leaseholders, only 2 of them are women. A sample of participants in various meetings are shown in Table 48.


Table 48. Sample of Meetings Held by LUOC with Local Community

№ Date of Meeting

Meeting Participants

Number of male/ female participants

Topics Discussed/ Issues Raised

Agreed Actions

11/03/2009 1. Khasanov B. - Deputy Khokim of the district, Chairman of the Committee 2. Avezov N. - Head of district department of land resources and cadastre 3. Rakhmatov B. - Chief Architect of the district 4. Rakhmatov G. - Head of interdistrict inspectorate on nature protection 5. Mamirov O. - Head physician of district Sanitary & Epidemiological Station 6. Khuseynov S. - Head of Fire safety office of the district Department of Internal

Affairs 7. Tillaev F. - Chairman of the cooperative farm “Karakul” 8. Bobokulov A. - Director of state forestry “Karakul”

8/0 Discussed issues related to land acquisition and planned activities of the Operator / Procedure for land acquisition and assessment of compensation.

- a decision was made to consult all interests of the farms under the current legislation of the RUz. According to legislation of the RUz, the farms will receive compensations for lands withdrawal at 889445 soum per 1 ha/year (around 593 USD per 1 ha/year) (all payments will be affected by Operator during land withdrawal under the Project).


Affairs 7. Bobokulov A. - Director of state forestry “Karakul”

7/0 Discussed issues related to land acquisition and planned activities of the Operator / On planned in soon additional outlets

- Information was provided on the projected diversion in the preparation phase of the project and associated infrastructure.


Affairs 7. Tillaev F. - Chairman of the cooperative farm “Karakul” 8. Bobokulov A. - Director of state forestry “Karakul”

9/0 Discussed issues related to land acquisition and planned activities of the Operator / reduce the harm on ecology and the possibility of land use in the future.

- regarding solid domestic waste treatment – the company responsible for such treatment was identified jointly with the local government bodies. The Operator has experience, personnel, equipment and a specially allocated landfill for waste storage.

- regarding drilling waste that will be generated in the drilling process - information was provided that the project implies the temporary storage for keeping and treatment of drilling waste.

20/05/2009 1. Khasanov B. - Deputy Khokim of the district, Chairman of the Committee

2. Avezov N. - Head of district department of land resources and cadastre

3. Rakhmatov B. - Chief Architect of the district

4. Rakhmatov G. - Head of interdistrict inspectorate on nature protection

15/1 Discussed issues related to land acquisition and planned activities of the Operator /

- a decision was made to consult all interests of the farms under the current legislation of the RUz. According to legislation of the RUz, the farms will receive compensations for lands withdrawal at 889445 soum per 1


№ Date of Meeting

Meeting Participants

Number of male/ female participants

Topics Discussed/ Issues Raised

Agreed Actions

5. Mamirov O. - Head physician of district Sanitary & Epidemiological Station

6. Khuseynov S. - Head of Fire safety office of the district Department of Internal Affairs

7. Bobokulov A. - Director of state forestry “Karakul”

8. Tillaev F. - Chairman of the cooperative farm “Karakul”

9. Nurmatov H. - Chief of farm enterprise “Khavlon”

10. Juraev O. - Chief of farm enterprise “Ergash Juraev”

11. Bozorov K - Chief of farm enterprise “Khalim bobo Bozorov”

12. Khasanova R. - Chief of farm enterprise “Maksud Erkin javohiri”

13. Allokov N. - Chief of farm enterprise “Khujamkuli Muhiddin”

14. Mamatov G.- Chief of farm enterprise “Gofir Mamat”

15. Shukurov R. - Chief of farm enterprise “Ibrat-91”

16. Abdullaev R.- Chief of farm enterprise “Abdulla Juma zur chorva”

Procedure for land acquisition and assessment of compensation, reducing harm on ecology and opportunities for land use in the future.

ha/year (around 593 USD per 1 ha/year) (all payments will be affected by Operator during land withdrawal under the Project).

- regarding solid domestic waste treatment – the company responsible for such treatment was identified jointly with the local government bodies. The Operator has experience, personnel, equipment and a specially allocated landfill for waste storage.

- regarding drilling waste that will be generated in the drilling process - information was provided that the project implies the temporary storage for keeping and treatment of drilling waste.


452. Upon the results of the meetings, having summarized all the proposals and comments, the following decisions were communicated to the consultation participants:

regarding solid domestic waste treatment – the Operator responsible for such treatment was identified jointly with the local government bodies; Operator has experience, personnel, equipment and a specially allocated landfill for waste storage;

regarding drilling waste that will be generated in the drilling process - information was provided that the project implies the temporary storage for keeping and treatment of drilling waste;

regarding the size and procedure for payment of compensations to farms - a decision was made to consult all interests of the farms under the current legislation of the RUz: according to legislation of the RUz, the farms will receive compensations for lands withdrawal at 889 445 soum per 1 ha/year (around 593 USD per 1 ha/year); all payments will be affected by Operator during land withdrawal under the Project.

453. On 23 March 2011, the Operator held public consultation meetings for the population of Alat and Karakul districts of Bukhara Province (see Attachment 13). The first meeting took place in Alat district in the building of local hokimiyat from 11:00-12:45. The second meeting was held from 14:30-16:30 in Karakul district. Representatives of mahallas, farmers, women's groups, NGO, mass media and local government participated in the meetings (more than 60 participants).

Operator gave a presentation of Oil and Gas operations: the Kandym project, the findings of the EIA, grievance redress process, project related employment opportunities, preliminary information on construction schedule, among others. Key issues that were initiated by participants and discussed:

jobs and possibility for local specialists to work for the project;

environmental pollution from the plant;

health issues concerning to possible contribution to illnesses that are endemic to the region;

land use, compensation and return mechanism;

social and charity programs of Operator and request to support local schools, colleges;

whether additional housing will be constructed for workers;

economic programs and possibility for local entrepreneurs, in particular possibility to supply goods and services to Operator enterprises in the district;

possible impact and measures in case of the earthquake and its impact on the plant and population.

All above issues was discussed by Operator’s team. Additionally the contact details of Operator’s head office and office in Bukhara was given.

7.2 Construction and Operations Phase 454. During project construction, LUOC will continue its engagement with the citizens of the Karakul, Alat, and Jondor districts particularly the residents of the kishlaks that are located within the KGF Contract Area. The drilling and construction period, which will continue until 2019, LUOC Public Relations Department together with other LUOC staff handling ecology issues, human resources, charitable activities will visit each community to consult with village representatives and identify any concerns or issues related to the Kandym project. LUOC will agree with the chiefs of Khohikimiyats and the mahallas on the frequency and timing of consultations to avoid disrupting their agricultural and other daily activities. In traditional Uzbek society, women are not the


decisionmakers, hence, only household heads usually participate in meetings. During construction and operations phase, LUOC will encourage the participation of women in meetins, particularly women's groups or women business owners and communicate this request to the chiefs of Khohikimiyats and makhallas.

455. To ensure that meaningful consultations are conducted with the nearby communities, the public consultation and project disclosure program during this stage will include informing the community of the status of project implementation, how the concerns and issues raised particularly by women during previous meetings were addressed, land requirements for facilities for which detailed engineering design are still being prepared, availability of jobs and business opportunities, particularly for women entrepreneurs who may be interested to provide services to the camp (e.g. food catering, cleaning and laundry services) and corresponding criteria for selection, and camp security protocols, among other issues. To avoid any accidents they will be informed about the schedule and location of construction activities (e.g. laying of gas pipelines) that may pose hazard to villagers and their livestock.

456. LUOC ecology staff will also inform the communities of the results of the environmental monitoring and environmental and social mitigating measures that have been implemented. Such information will be communicated in a form and language that local people will easily understand. LUOC will take into consideration the comments and suggestions made by the communities and see how these can be addressed in their operations. Grievances received will be recorded and resolved in accordance with the procedure described in Chapter 8.

457. Where screening of final location and alignment of the railway, access roads, transmission line towers and gas pipelines and other project facilities reveals that there are involuntary resettlement impacts, consultation and participation activities will be undertaken as described in the Resettlement Framework.

458. During Operations Phase, at a frequency of once every quarter, under requirements of the laws of the RUz, environmental monitoring will be conducted by the State Specialized Inspectorate for Analytical Monitoring of the State Committee for Nature Protection of the RUz. The monitoring results will be sent to the units of the State Committee for Nature Protection of the RUz (including the Bukhara regional Committee for Nature Protection) and the competent bodies. This information will also be distributed among the population under the Operator business coverage in mass media.


8. Procedure for addressing grievances 459. Carrying out its operations on the territory of RUz, the Operator entirely complies with the legislative and regulatory acts adopted by the state bodies. Due to this, all the incoming correspondence is reviewed in full compliance with Law No 1064-XII of the RUz re: “Appeals by Citizens”, as well as under corporate requirements adopted by the Operator.

460. An objective of the Operator is providing for a redress mechanism to avoid potential delays on the commencement of construction works or operation of the Project. The primary objective will always be to prevent grievances rather than going through a redress process. This can be obtained by ensuring full participation and consultation with affected people (AP), nearby communities, and local governments in general.

461. In the process of meetings and consultations, already held and planned, Operator informs local population that it is ready to hold negotiations and discuss arising issues both at the level of operating personnel directly at site (i.e. at oil and gas production shops) and at the level of Tashkent head office departments and divisions.

462. Taking into account possible activity related risks and consequences Operator pays great attention to strengthening of cooperation with local population. At the same time Operator does what it can to help local population in solution of arising problems not related to immediate activity of Operator.

463. For example in 2010 in the territory of South – West Gissar (Kashkadarya region) there were mudflows, caused by abundant precipitations, that resulted in obstructions at irrigation system and automobile roads of Bibikorasoch village. In connection with oral appeal received by Operator representative (at oil and gas production shop) from representative of local public authorities Operator decided to help in clearing of vital for the village infrastructure. The problem was solved by joint efforts of Operator and local people thanks to smooth cooperation of field representative of Operator with local public authorities.

464. During the first half of 2011 it is planned to hold next number of meetings with local population for disclosure of information about activity of Operator in Bukhara region, during these meetings special attention will be paid to major aspects of Kandym project implementation and issues of citizens’ appeals administration.

465. The APs should be aware of the procedures on the resolution of grievances, which the Operator will inform during Project disclosures and public consultations. An important issue here is to establish and maintain a high level of continuity between the public consultation and project disclosure program which will include briefing on grievance redress, the recording and management of specific cases and the more general project-wide monitoring and evaluation (M&E) provision.

466. Grievances lodged by an AP can relate to any aspect of the Project. A grievance redress mechanism for conflict resolution will be part of the institutional and implementation process. The focal point will be the Operator’s local project office. An officer there will receive training in the management of the grievance procedure.

467. At field level a community complaints-management register (CCMR) will be maintained of all grievances related to social or environmental issues. This will help ensure that complaints are appropriately redressed by the Operator.

468. Affected communities and their representatives will be identified during the project preparation stage. Operator’s officers will visit each community once every quarter or as desired by the community, in the course of 3 years while each office will maintain a record of these visits (date visited, persons met, issues discussed and complaints bought forward) using the CCMR.

469. The Project office will work towards resolving the grievances recorded in the CCMR as follows:


Under Article 18 No 1064-XII, all citizens' appeals in writing, containing the data on its proposer, shall be reviewed within one month period from the date of receipt, except for such appeals that require more detailed analysis, and the proposer is informed about such case within ten days. Anonymous appeals will not be reviewed.

All appeals from individuals or legal entities are to be reviewed at the Corporate records Department and are further transferred to the Operator executive, who makes an order on their execution and appoints the person in charge.

Requests and grievances are handled within a month from the date of receipt by the Operator. The requests and grievances that do not require additional review and checks are addressed within the deadlines not longer than fifteen days.

When handling a request of a grievance requires checks, requesting for additional information or taking other steps, the deadlines for handling the requests or grievances may be extended, as exceptions, by the Operator CEO but not longer than a month, the applicant who filed this request or grievance being notified.

In all cases, the latter’s response will be formally communicated to the complainant in writing.

470. The CCMR will be periodically (at least quarter) reviewed at a high-level management meeting at the Operator’s Project office, and the necessary actions will be taken to redress outstanding issues as soon as possible, with a formal response communicated to the complainant in writing. Any observations made by Local NGOs and CBOs will also taken into consideration in the redress process.

471. Persons who are not satisfied with the resolution of their grievances using this procedure have a right to bring the grievance to the attention of the appropriate government agencies or the courts in accordance with the provisions of the Law.


9. Environmental Management Plan (EMP)

472. To ensure that the ecological balance and environmental safety are preserved during construction until plant operations, an EMP (Table 47) has been established. Any adverse effect on the environment could be controlled if it is averted at an early stage and necessary mitigating measures are applied. The main objective of the EMP is to minimize the direct and indirect negative environmental impacts of the Project through planning and the introduction of proper construction and monitoring techniques during all phases of project implementation. To ensure that proper designs and operational standards are adhered to, and that the environment and public safety are not compromised, site practices and procedures of the EMP should be followed strictly throughout the lifetime of the Project.

473. Environmental monitoring programs as required by the state regulations will be carried out and the results will be used to evaluate: (i) the extent and severity of actual environmental impacts against the predicted impacts, (ii) the performance of mitigation measures and compliance with related rules and regulations, (iii) trends of impacts, and (iv) the overall effectiveness of the project EMP. Environmental and human protection measures such as the Health, Safety and Environmental Program including Occupational Health and Safety and Emergency Response Plan (ERP) on handling emergency situations during fire/explosion, releases, spills, natural disasters, etc. As part of the overall EMP, long-term and active partnership with the community and other project stakeholders are being supported by the Operator through implementation of the social mitigating measures, consultation and participation program during construction and operations phase and the grievance mechanism. The detailed description of the EMP are discussed below:

The Operator will establish an environment department at the corporate level that will

lead and promote the environmental management of the Project during construction and plant operation. This department will be headed by an lead environmental manager and will be supported by adequate qualified and experienced staff on environmental management. The department will coordinate closely with the operations and maintenance group for the smooth maneuver of the plant. Personnel from the environment department will have appropriate training and education to ensure that they have the proper knowledge and skills to handle environmental management programs.

The Operator will mainstream the current environmental management system, (ISO 14001 and ISO 18001 certified ) for KGF operations to monitor compliance with the environment, health and safety concerns.

The Project will comply with all the relevant local laws and regulations regarding environmental protection.

474. During project realization continuous control and implementation of nature-conservative measures, decreasing impact to objects of environment (OE), will be one of the key aspects within EMP framework.

475. Main flow processes will have continuous and direct character of impact to OE connected with chemicals emission to the atmosphere, water resources consumption, formation of liquid and solid wastes, noise and vibration level near production sites, soil and vegetation cover destruction and influence on existing natural biocenoses.

476. In the stage of Draft Environmental Impact Assessment (1 stage of EIA), parameters of environmental impact (such as air emissions, wastes, discharges, noise exposure, etc.) were defined as moderate. Maximum estimate indicators of environmental impact do not exceed the norms in the Republic of Uzbekistan.


477. There will be definite degree of impact on OE during construction works (including operation wells construction), but taking into account short-term character of impact on the atmosphere during construction works, there will not be OE dramatic changes.

478. Main nature-conservative measure, which minimizes impact to OE (including atmospheric air, water, soil etc.) during project implementation, is selection of equipment and technological processes, that allow to increase extraction of all valuable and possible components of raw materials (well production) – organization of low waste production cycle.

479. Besides, on each stage of project implementation detail plan of organization-technical measures is developed with purpose of regulation and management of environmental impact. This plan includes nature-conservative measures, personal responsibility, recourses and schedule (see Attachment 7).

480. Jointly with territorial body of SCNP of RUz, on each stage of project implementation, an annual plan of nature protection and rational use of natural resources is developed. These plans are based on expert advice and recommendations of SCNP of RUz, which were given at the State Environmental Expertise stage. Implementation of all management measures presented in these plans is coordinated by this territorial body of SCNP of RUz. Reports on implementation of those action plans are in Attachments 9 and 10.

481. Control of EMP implementation is performed on a quarterly basis with the results obtained by the Operator in coordination with State Committee for Nature Protection of the RUz.

482. Additionally, jointly with Authorized Body an HSE program is developed (see Attachment 8). HSE program includes the health, safety and nature protection measures related to implemented projects. This program is elaborated in accordance with two earlier described mechanisms of EMP (plans of organization-technical measures and plans of environment protection and rational use of natural resources) and includes operative initiatives of Authorized Body, which do not control this matter directly but facilitate increase of industrial safety and health level within the Contract Area.

483. All above plans/programs include specific measures of environmental management, provide technologic, technical, managerial solutions and the scientific assessment and analysis of optimal scenario of planned activity. For each measure specific term of fulfillment is established associated with current project implementation strategy, specific persons are appointed responsible for effective realization of this measure as a well as cost of its realization.

9.1 Health, Safety and Environment Program 484. The Operator will continue to implement and maintain an Integrated Health, Safety and Environmental management system (HSE MS) that is consistent with ISO 14001 and OHSAS 18001 and mainstreamed in the overall well drilling and construction activites and plant operations to ensure that environmental and industrial risks are properly managed. At the same time, Operator’s operations are guided by the companies' environment, health, and safety policies and programs addressing various operational risks. The constant maintenance and regular monitoring programs has been the key in preventing any failure/explosion of pipelines or well blowout10 from happening. The accident records of the plant have been extremely low, with very few complaints or injuries. Seminars on health and safety monitoring and improvement were conducted.

485. Health, safety and environment program in respect of the Oil and Gas operations within the Contract Area for 2010-2012 (hereinafter “the Program”) was developed in accordance with:

10.The most significant hazardous event that can occur in the gas field operation are steam pipeline failure and well blow outs. The pipeline failures may result in the release of toxic drilling activities and fluids, as well as hydrogen sulfide gases from underground formations. Pipeline ruptures may also result in the surface release of fluids and gas containing heavy metals, acids, mineral deposits, and other pollutants.


Production Sharing Agreement concerning the site of Kandym group of fields, Khauzak and Shady fields and Kungrad field dated June 16, 2004 (hereinafter “PSA Kandym-Khauzak-Shady-Kungrad”), concluded between the Republic of Uzbekistan and investors consortium consisting of Open Joint-Stock Venture “LUKOIL” Oil Company (predecessor of LUKOIL Overseas Uzbekistan Ltd.) and National Holding Company “Uzbekneftegaz”;

Production Sharing Agreement concerning the fields on the territories of South-West Gissar and Ustyurt region of the Republic of Uzbekistan dated January 23, 2007 (hereinafter “PSA Gissar”) concluded between the Republic of Uzbekistan and “Soyuzneftegaz Vostok Limited” Company.

486. This Program was developed based on and in accordance with the requirements of:

Annual operating program for 2010-2012; Operator’s Budget for 2010-2012; Health, Safety and Environment Policy; Program on safety, improvement of conditions and safety of labour, emergency

situations prevention and response at OJSC “LUKOIL” and other organizations of “LUKOIL” Group for 2006-2010;

Environmental Safety Program of “LUKOIL Uzbekistan Operating Company” LLC for 2010-2012;

Rules and Procedures of Health, Safety and Environment Sub-committee of Management Committees approved by the Resolutions of Management Committees as of 30.03.2009.

9.1.1 HSE Policy, Objective & Commitment

487. LUOC primarily engages in oil and gas development in Kandym group of fields and the production of natural gas and hydrocarbon condensate. The Operator’s HSE policy is: “industrial hazards and risk free management, effective accident-preventive measures, law-abiding operations, and sustainable development”.

488. The purposes of establishing the HSE Plan are to:

Raise the level of environmental, health, safety and social responsibility management of LUOC;

Assure that corporate operation and management activities are operated within the framework of relevant HSE laws & regulations and are conforming with relevant international management practices;

Minimize wherever possible, the occurrence of hazardous events such as personnel injuries, property loss and environmental damages;

Promote harmonious coexistence between the enterprise and surrounding communities;

Achieve a strategic policy of sustainable development.

489. LUOC is committed on adhering to its HSE Plan during phases such as pre-production, production, operation and management activities in order to improve management level, to protect the environment, to minimize the occurrence of accidents, to protect employees’ health and to take on and fulfill social responsibilities.

490. To carry out the above policy, LUOC is fully committed to:

Be consistent and compliant with all applicable laws, regulations and other requirements; Insist on the prevention first and process control management policy, carry out

continuous environmental and social impact assessments and risk evaluations to effectively control and prevent occurrence of environmental contamination, accidents


and endeavor to avoid and eliminate work-related injuries and diseases, protect personnel’s health and to coexist in harmony with surrounding communities;

Strengthen the HSE awareness and knowledge training of both the management and the personnel to avoid violating labour, health and safety laws;

Commit and allocate resources such as the necessary manpower, material resources and financial resources to assure effective and full implementation of the HSE management system to continuously improve the Operator’s environment, health, safety and social responsibility performances;

Fulfill the HSE responsibilities and carry out regular HSE management system audit to assure its sustainability, sufficiency and validity; endeavor to create a corporate culture which advocates environment, health, safety and social responsibilities with constant encouragement and strengthening compliant HSE behavior.

491. The achievement of the Operator’s HSE objectives and targets depend on the cooperation of all departments and functional levels. The Operator establishes commitment from the high level to lower level.

9.1.2 Structure and responsibility

492. The Operator establishes the structure suitable for the implementation of the HSE Plan and clarifies the HSE responsibility of each unit, each department and each personnel. It also designates reasonable human resources, financial resources, organizational infrastructure, specialized skills and technology to achieve the HSE policy and objectives.

493. The Operator establishes the HSE management organizational structures and management networks, sets up the HSE management committee within that framework as well as an office that is responsible for routine activities related to the HSE management. The organizational structure of the HSE management system is shown below.


Picture 33. HSE Organization Structure

Top Management representative – Deputy Director General for Operations

Е.G. Zubarev (1)

Head of HSE Department Kamanin V.Е. (1)

Head of Ecology Department Kusnuyarova А.F. (1)

Chief EcologistKim D.L. (1)

Leading Ecologist Nuriddinov Е.N. (1)

Leading EcologistKhudaybergenova A.A. (1)

Leading Operations Control SpecialistAzimov T.S. (1)

Leading Fire/Gas Safety SpecialistDjumanov E.G. (1)

Leading H&S Specialist Mamutov P.M. (1)

Leading Safety SpecialistKalachev О.К. (1)

Leading Traffic Safety Engineer Umarov Z.R. (1)

Leading Engineer of HSE Service Khauzak Gas Production Facility

Davlatov А.К./Skoriy V.I. (2)

Environmental EngineerKhauzak Gas Production FacilityAkhmedov K.R./Eremina N.V. (2)

H&S Engineer Kandym Section

Taktarov N.F./Mikhraliev T.I. (2)

Leading HSE Engineer Gissar Oil & Gas Production Facility Kadirov U.A./Khanbikov Kh.Yu. (2)

Total: Positions – 15

Staff – 19

494. The Top Management representative – Deputy Director General for Operations is the primary person responsible for implementing the HSE. He represents the Operator to provide an open and specific commitment towards the staff and community. The Deputy Director General for Operations gives the documented commitment for the implementation of the HSE and ensures it is supported by the human resources, finance and materials departments. The HSE Department shall have the following responsibilities:

Promote and implement State and local government’s policies, laws, regulations related to the HSE issues and corporate HSE MS and regulations, execute the HSE policies and regulations of superior and relevant departments.

Have the HSE management meeting periodically to review and discuss the HSE performances or annual report, examine major accidents management issues.

Report periodically to the top management to provide the management review.

Organize and undertake periodic inspections and supervisions of the HSE activities, carry out corrective and remedial measures on hidden dangers of major accidents and on non-conformable items in order to make sure of the normal operation of the HSE management system.

Strengthen HSE awareness, undertake and perform one’s duties with skill and proficiency.

Enforce the right to refuse any instructions against job regulations, dissuade and prevent others from working against job regulations.

495. Key activities included in the present Program are developed in consideration of substantial industrial risks of the Operator indicated in Substantial Industrial Risks Registry for the year 2010 and aimed at decreasing the probability of hazards and/or minimization of consequences.


496. Operator’s Occupational health and safety Department and Ecology Department shall perform the organization and control over the activities accomplishment under the HSE Program.

9.1.3 Preventive Measures Program

497. The fundamental principle of Operator’s activities in the sphere of health, safety and environment is the observance of the priority of planned and accomplished activities and measures related to prevention of adverse effect to the environment, health of the personnel and population before recovery of consequences of this effect.

498. In this relation the most of health, safety and environment activities have the preventive character and may be divided into the following directions:

Development and execution of regulatory and permissive documentation in the sphere of health, safety and environment;

Development and coordination with the government authorities of the Republic of Uzbekistan of standards and procedures of the Operator regulating the conduct of Oil and Gas operations in the sphere of health, safety and environment (including ecological monitoring program);

design and estimate documentation expertise for compliance to the requirements of the legislation of the Republic of Uzbekistan in the sphere of health, safety and environment and Operator’s corporate requirements;

operational control over observance by the contracting organizations of the requirements of the applicable legislation of the Republic of Uzbekistan in the sphere of health, safety and environment;

organization of continuous ecological monitoring over Oil and Gas operations performed; organization and conduct of radiation control on the territory of the objects as well as the

manufacturing quality control of drinking and waste water; organization and conduct of manufacturing control of harmful production factors; compulsory fire safety and gas safety briefing to all persons before allowance to

production facilities as well as workplace briefing (initial, periodic, extraordinary and one-time) for working personnel;

conduct of pre-placement and periodic medical examinations, medical service, insurance and compulsory vaccination of personnel;

personnel training to basic ecological notions and emergency situation actions, training and certification on occupational safety and health of directors, specialist and working staff, involved to works at hazardous production facilities training of personnel to safety methods and emergency situations actions, first-aid treatment rules;

implementation of survey and assessment for technical condition of process equipment and pipelines exposed by aggressive media;

implementation of corrosion protection system and technical supervision of safe operation of process equipment and pipelines;

assessment and bringing into compliance with the requirements of workplaces on working conditions;

provision to the personnel individual protective equipment, protective clothing and footwear (including gas analyzers and respiratory protective equipment);

equipment of production facilities with fire and engineering equipment, emergency firefighting equipment as well as organization of maintenance of fire fighting system, security and fire alarm and alert at production facilities;

development and implementation of emergency prediction and prevention system, preparation and keep prepared for use of forces and means for prevention and liquidation of emergency situations;

development of emergency response plan;


interaction with state regulatory bodies of the Republic of Uzbekistan on issued of health, safety and environment.

499. In selecting of optimal health, safety and environment actions the technical feasibility, expected risk reduction level as well as expenses for realization thereof shall be taken into account.

500. Those actions that may have maximum effect in risk reduction with the minimal efforts and expenses shall have the priority.

501. These are primarily the actions aimed at: Collection, analysis and update of initial information (regulatory support, design and

estimate documentation expertise); Increase of level of consciousness of each employee regarding to the health, safety and

environment (including training, briefing, direct recruitment and motivation); Continuous monitoring and control over the compliance with the requirements in the

sphere of health, safety and environment (assessment of work places, production control of hazardous factors, ecological monitoring).

9.1.4 Occupational health and safety

502. Operator shall provide workers with safe and healthy working environment, shall take measures to eliminate by the greatest extent factors that may cause danger, shall prevent accidents, hazards and diseases arising from the work or occurring during the operation. Operator shall identify potential hazards for workers and provide them with protective and preventive measures. Relevant training programs shall be carried out on fire safety of oil, gas treatments, storage and transport units. Occupational accidents, diseases and preparedness, protection and response to emergency situations within the industrial site shall be recorded and be reported. In addition to this, record of all possible potential emergency situations sources outside of the facility in nearby periphery to include the hazard level for personnel and population according to risk magnitude.

9.1.5 Emergency Response Plan

503. Operator has set up the Emergency Response Plan to prevent hazardous events related to preparation and transportation of natural gas. Natural gas is highly explosive when mixed with air under certain concentration. This procedure facilitates the identification of the type of accident and its location, actions required, and the responsible persons to address emergency situations at the different project facilities such as gathering stations, treatment facilities, landfill for disposal of wastes, shift camp and production wells. The factors promoting occurrence and development of accidents are as follows:

(i) can be due to the presence of hydrocarbons (above 200 tons) at a facility which explosive and fire hazardous substances and create danger of accidental discharge of a hazardous substance;

(ii) operation or equipment under excess pressure and high (low) temperature makes possible for accidental discharge of a hazardous substance (e.g. hydrogen sulfide, methane, unstable gas condensates, corrosion inhibitor);

(iii) high corrosive capability of technological products, presence of moist and hydrogen sulfide;

(iv) mechanical wear and tear that will cause leakage through looseness in flange couplings, gasket sealing, weld seams, under chemical corrosion of equipment with appearance of end-to-end holes as well as during disassembly of devices and pipelines which are not prepared for repair;

(v) installation defect in technological equipment, control and automation facilities, safety valves, electric equipment as well as protection means/devices from static electricity and lightnings;


(vi) extraneous mechanical effects; (vii) human error; (viii) defective design; and (ix) faults in energy and materials logistics, extreme weather conditions, terrorist acts.

504. The accident prevention measures at proclaimed facilities as well as countermeasures to possible terrorist attack are the following:

Round–the-clock security system to monitor activities on the perimeter area, facilities and check-point regime to prevent entry of unauthorized persons on the territory of an industrial site;

Provisions for a fire safety and gas alarm systems, a system of video surveillance over access control other engineering and technical facilities to ensure safety and security;

Compliance with the requirements of industrial safety for readiness to actions on localization and liquidation of accidents and emergency situation consequences including conduct of HAZOP analysis for project facilities prior to operation;

Provision of communication management and warning system, forces and facilities, stocks of material and technical as well as financial funds are established in case of emergency situation (ES);

Accident elimination and ES prevention and elimination plans are developed; A training program for employees for protection and action methods under ES are

established; Creation of a documentation and reporting system in case of incidents, accidents and

ES, Interaction with state authorities during ES and structural divisions is organized; Creation of emergency stock; and Set-up of emergency services to handle accidents, accident/gas rescuing service and

other services ensuring industrial safety.

9.1.6 Emergency Response Plan Committee

505. In support to the implementation of the ERP, an Emergency Response Committee (ERC) will be established. The ERC will be the coordinating body for civil protection in the Operator. It intends to conduct a unified policy on prevention and elimination of industrial accidents and natural disasters on the facilities of the Operator and its production units. ERC shall develop work plans that will serve as guidance over the development and implementation of measures to prevent and eliminate consequences of emergencies, to improve the reliability of potentially dangerous areas, and to ensure sustainability of the organization in emergency situations. The preventive measures for defence from the serious accidents will be developed during the future project design stage and after preparation of the technical and economic feasibility report.

9.2 Environmental Monitoring Program

9.2.1 Internal Monitoring

506. Organization whose activity can lead to environment worsening carries out monitoring of environment and natural resources utilization - Production and Ecological Monitoring (PEM). PEM root principles are oriented to indicators of diagnosis and early warning about environmental trouble, normative and standard requirements observance by subjects of economic activity. PEM is carried out with purpose to provide observations, account, assessment and forecast of environment and its resources state within the Contract Area and is one of the main EMP components (as a preventive nature-conservative measure). The following tasks are fulfilled during PEM implementation:

observation of environment state and its changes under influence of economic activity;


checking programs and separate measures fulfillment envisaged by EMP, environment rehabilitation, observance of nature protection legislation and environmental

quality normative; timely revelation and prediction of natural and technogenic processes development, which

influence environment within the Contract Area; establishing information base necessary for measures to be undertaken to provide

environmental safety of personnel within the Contract Area.

507. Above tasks are accomplished by means of regular data collection relating to environment components’ pollution level, integrated analysis of these data regarding ecologic norm observance, provided by existing legislation, and environmental assessment within the Contract Area.

508. PEM organization and conduct is the responsibility of Operator of economic and other activity and its observation network covers production site, enterprise sanitary-protected zone and adjacent residential areas, specially protected natural objects and recreation zones. PEM implementation is performed on the base of specially developed program determining observation network distribution, sampling intervals, list of control indicators, routing investigation character and composition of reporting with account of technologic peculiarities of planned production and predicted level of impact on environment components.

509. PEM should be integrated i.e. observations should be carried out for all environment components: atmospheric air, surface and ground water, geologic environment, soils, radioactive situation, flora and fauna as well as all types of wastes resulting from planned activity. Observation system is established and starts functioning before preparatory works. Observation of this early stage are necessary to fix ecosystem state before intensive machinery work in order to have initial starting points during interpretation of obtained observation results at the next stages of construction project implementation and its operation.

510. PEM during operation period is carried out over developed system of fixed points (sampling) and traced routes (vegetation, wild life). Under normal operation all observations are conducted in accordance with existing methodology and regulated frequency and analytical investigations – in accredited laboratories having appropriate certificates.

511. PEM procedure is carried out by Operator continuously since the Oil-and-Gas Operations (like seismic exploration and workover of “historical wells”) at the KGF started (2005). PEM mechanisms are continuously improved together with concerned state organizations (SCNP).

512. The principal scheme of PEM implementation by Operator is as follows:

1. Program is being developed on annual basis with regard to current plans of project implementation and EMP measures and in accordance with standards of the RUz in sphere of production control and environment monitoring.

2. Program coordination with SCNP of the RUz and Authorized Body on project implementation and project description distribution among local subdivisions.

3. Conclusion of contracts on PEM conduction and working group establishing from qualified specialists of appropriate accredited laboratories (having appropriate state certificates). PEM implementation by Operator is performed with involvement of the State Specialized Inspection of Analytical Control (SSIAC) belong to of SCNP of the RUz, Gosbiocontrol, Ministry of Public Health of the RUz and others.

4. Field investigations consisting of visual observations, operating measurement of environmental parameters, routing biotope account, sampling and samples conservation.

5. Laboratory analyses of atmospheric air, surface and ground water, soils and grounds, plant and animals tissue.

6. Preparation of intermediate reports on PEM results including information about state of environment components.


7. Definition of factors, if necessary, of environment pollution, operative elaboration and implementation of corrective measures.

8. Drafting annual report and its coordination with SCNP of RUz. Report submission for consideration to regional subdivisions and authorized body.

9. Development of PEM strategy for forthcoming period.

513. According to the annual PEM Program, developed by Operator and approved by State Committee for Nature Protection of the Republic of Uzbekistan, targets of ecological monitoring shall be as follows:

open air; surface water bodies and watercourses; ground and subsurface water; soils and grounds; plant and animal life; radiation environment.

514. Area of Kandym group of fields section, physiographic and other natural factors, “historical” pollutions as well as monitoring results of previous years are taken into account during arrangement of environmental monitoring stations and defining their number. Main principle of monitoring network arrangement is optimum coverage of all building operations planned by Operator at Kandym group of fields section for 2011.

515. A two-level ecological monitoring network shall be established:

background stations – for assessment of natural background concentration of components in objects of natural environment which depends only on the degree of natural environment impact; they shall be located outside Kandym group of fields section or far from industrial sites;

local stations – for control over pollution of natural environment objects directly in the areas of conducted Oil and Gas Activities; they are located in the territory of industrial sites or in their immediate vicinity.

516. Altogether PEM Program for 2011 provides for:

24 stations for monitoring of open air condition; 3 stations for monitoring of surface and subsurface water condition; 24 stations for monitoring of soil condition and 24 stations for monitoring of ground

condition; 9 stations for radiation monitoring; 4 sites for biotic monitoring.

517. Monitoring stations layout at Kandym group of fields section for 2011, accepted according to PEM Program, is given in Attachment №11.

518. Monitoring frequency set forth in PEM Program is 3 times per year; if increase of monitored parameters concentration is detected monitoring shall be more frequent.

519. According to PEM Program open air condition shall be controlled by the following components:

carbon monoxide; nitrogen oxides (nitrogen dioxide equivalent); sulphur dioxide; hydrogen sulphide;


hydrocarbons (total); phenol. percentage of oxygen, nitrogen and carbon dioxide (CO2) mercury

520. So under PEM Program Operator performs monitoring and control of the following greenhouse gases:

carbon dioxide (CO2); hydrocarbons (by methane); nitrogen oxides (nitrogen dioxide equivalent).

521. Together with air sampling main meteorological parameters, air temperature, direction and speed of wind, state of weather, noise level, shall be monitored.

522. Statutory MPC norms for working air shall be applied as sanitary norms for assessment of air quality inside facilities, assessment of air quality outside industrial facilities (sanitary protection zones) and in selective zone shall be performed based on statutory norms of one-time maximum MPC for air in populated areas.

523. For control of surface water at Kandym group of fields section water samples shall be taken at the inlet of Main Karakul Collector (near Chandir settlement) and at the outlet of Main Karakul Collector (in North East part of KGF). There is no other surface water at KGF section, and taking into account farness of monitored sites from Main Karakul Collector and absence of waste water discharge into surface water bodies monitoring of surface water at local stations is not planned.

524. Taking into account that ground water level at Kandym Group of Fields section cannot be exposed at the depth of up to 6 m ground water is not monitored, and subsdurface water monitoring is performed from existing water supply wells.

525. PEM Program provides for analysis of the following components in water:

рН; suspended matter; chemical oxygen demand (COD); general mineralization; ferrum; xylol; mercury; hydrogen sulphide; phenol; petrochemicals.

526. Immediately during water sampling in field conditions its temperature shall be measured and content of dissolved oxygen shall be analysed.

527. Monitoring of soil and ground condition provides for sampling and рН analysis, analysis of soil-water extract dry residue, ferrum, petrochemicals and phenols in samples.

528. At every monitoring station one sampling stat is provided both for soil covering (depth of sampling is up to 0.5m) and for ground (depth of sampling is up to 6 m), at that samples shall be taken by “envelope” method (samples are taken from five spots, four in the corners of sampling point and one in the center) and averaged.

529. For assessment of radiation environment at KGF section well known methods of radiometric measurements shall be applied and the following shall be performed:

analysis of volumetric activity of radon and concentration of radium in water; analysis of radon fluence rate from soil level.


530. In the process of examination gamma-radiation exposure dose rate shall be analyzed. Concentration of natural radionuclides (uranium, radium, radon) in ground and subsurface water shall be analyzed.

531. In order to establisn observation network for monitoring of plant and animal life objects routes and observation stations defined in the previous stages of biotic monitoring (2005 – 2010) were used for comparison and identification of changes taking place in the biodiversity objects. Biotic monitoring consists of the following:

making of plant and animal inventory – defining their species composition; assessment of plants and animal population condition – presence of diseased animals,

considerable change in number of individual species animals; detection of factors affecting plants and animal population condition (disturbance factors,

presence of technogenic pollutants) and taking measures for their elimination; sampling of plants and prey of animals (organ tissues) for biochemical and histologic

analysis.

9.2.2 Documentation and Reporting

532. All samples taken in the process of field survey shall be preserved (if necessary), recorded in Sampling Report, prepared in accordance with GOST requirements, and handed over for analysis to laboratories accredited and certified by Gosstandard of the Republic of Uzbekistan.

533. Based on the results of laboratory research statistical analysis of data shall be conducted and condition of natural environment objects shall be assessed through comparison of monitoring data with statutory norms of quality of natural environment If any deviations from statutory norms are detected Operator shall find out reasons of deviations and take urgent correction measures as agreed upon with local nature protection authorities. Final reports on results of ecological monitoring shall be reviewed at the meetings of Subcommittee for environment protection and approval of reports by State Committee for Nature Protection of the Republic of Uzbekistan is obligatory. Besides Operator shall organize regular publication of ecological monitoring results in mass media.

9.3 External Monitoring 534. Currently there are two kinds of external monitoring and reporting activities being implemented for the project - the Operator’s ISO 14001 and OHSAS 18001 HSE MS audit (for re-certification purpose) and the other is the state requirement to environmental inventory every three years for the renewal of ecological norms.

9.3.1 ISO 14001 and OHSAS 18001 Management System Audit

535. One of the requirements of ISO 14001 and OHSAS 18001 international standards is regular certification audit of Health, Safety and Environment Integrated Management System conducted by certifying authority.

536. Audit methods - the analysis of the documentation and records of the HSE MS, interview with top and middle managers and the operational personnel, monitoring of the processes on workplaces, of condition of infrastructure and the industrial environment on sites and in Tashkent. The requirements of law, standards and also own requirements of Operator and requirements of “LUKOIL Overseas Holding Ltd.” established by the HSE MS are criteria of audit.

537. Based on the result of last ISO 14001 and OHSAS 18001 HSE MS audit (2009) was dan next conclusion:

audit allows making the conclusion that in Operator there is designed, documented and supporting the HSE MS according to requirements of the ISO 14001 and OHSAS 18001


subjected to audit, showing ability to achievement of the planned results and constant improvement;

оn the basis of stated the management system of Operator recommended to prolongation of validity of certificate according to ISO 14001:2004 and OHSAS 18001:2007.

538. The Operator is committed to adopt and implement the current ISO 14001 and OHSAS 18001 HSE MS and mainstreamed it in the overall Kandym Gas Processing plant operations to ensure that environmental hazards and industrial risks are properly controlled and managed.

9.3.2 State Regulations Required Environmental Inventory

539. In addition to this, the Operator is also committed to comply with the state regulations to conduct an inventory of hazards and pollution sources of the Contract Area every 3 years in order to confirm if the environmental impact forecasts that were made during the EIA stage are still valid and applicable with the present condition.

540. Environmental inventory is an review of existing enterprises and other units that produce environmental impact during operations phase. Such inventory is conducted by specialized organizations (companies) subject to the procedure and conditions established by the law. Environmental inventory is conducted at the discretion of the owner of a unit where economic or other activities are performed.The inventory evidence will be collected via inquiry, review of documents, observation of the operations and conditions, and events of incompliance with the criteria of environmental management system audit were registered.The environment inventory report is submitted to SCNP for State Environmental Expertise and after goes to Operator as basis for the issuance of subsequent 3-year ecological norms.

9.3.3 ADB SPS Monitoring Requirements by External Expert

541. As required by ADB Safeguards Policy Statement, an external expert or qualified NGO is required to be hired to verify monitoring information for projects with significant impacts and risks. The Operator will submit periodic monitoring reports on their implementation performance.

542. The external expert can be a consulting firm, an NGO or a design institute that has expertise on natural resource management, environmental planning, environmental impact assessment, waste management and familiarity with the environmental policies and safeguard requirements of ADB. The external expert should have a solid understanding of the Uzbekistan Laws on environmental protection and natural resource management, Uzbekistan environmental regulatory system and knowledge on oil and gas industry operations.

543. The overall objectives and functions of the external expert are as follows:

a) to satisfy the ADB SPS’s policy requirements for independent external monitoring and evaluation of environmental and social aspects of the Kandym E&S Project;

b) to verify the internal monitoring undertaken by the Operator;

c) to report regularly and advise to the Lenders and the Operator on environmental and social compliance issues that arise in connection with the Kandym E&S Project;

d) the applicable environmental and social policies and safeguard requirements of ADB

e) to review and comment (for the benefit of the Lenders and the Operator) on reports delivered by the Operator;

f) to review and comment (for the benefit of the Lenders and the Operator) on Corrective Action Plans prepared by the Operator.


544. The external expert will conduct semi-annual environmental compliance audit of the Kandym Project during construction phase of the project facilities. Monitoring by the external expert will commence upon financial closure.The required scope of work is listed below:

a) conduct 3-5 day site visits semi-annually to review and verify environmental compliance of the Kandym Project over the relevant audit period with the mitigation measures and related monitoring requirements prescribed in the EMP, as well as additional mitigation measures and monitoring requirements that the Kandym has agreed with the Lenders through;

b) interview Operator staff and contractors’ personnel, both at the LUOC head office in Tashkent and at the Kandym Project site; the purpose of the interviews is to verify the information in the environmental management and monitoring reports and seek clarifications if necessary;

c) conduct desk review of the EIA, EMP, previous environmental due diligence reports, ISO 14001 and OHSAS 18001 audit findings and applicable environmental covenants set out in the relevant legal agreements;

d) interview relevant district and provincial authorities involved in environmental protection and land acquisition;

e) interview corporate farm leaseholders from whom lands are being acquired representatives of mahallas of selected kishlaks located inside the Contract Area;

f) review and evaluate the environmental, health and safety, labor and working conditions of the environmental management and monitoring reports that the Operator has submitted to ADB (semi-annually) and to the Uzbekistan authorities (SCNP) annually, as well as the Operator’s internal data, records and reports generated in connection with the Kandym Project implementation of environmental and social mitigation measures;

g) determine whether there were any incidence of non-compliance during the audit period, assess the significance of the impacts of such non-compliance;

h) investigate the causes of the identified non-compliance incidents, and assess the adequacy of corrective actions taken by the Operator to prevent the recurrence of the noncompliance incidents;

i) recommend measures or activities to be taken by the Operator to improve its environmental compliance, with particular focus on significant non compliance;

j) report to or advise the Operator and the Lenders on specific environmental and social issues that may arise in connection with the Kandym Project; and

k) present the findings to the Operator and ADB.

545. The following responsible departments is responsible for preparing the semi-annual monitoring report to ADB:

Ecological Department;

Health and Safety Department;

Surveying Department;

Human Resources Department; and

Government Relations and Public Relations Department.

546. Semi-annual monitoring reports during construction phase and annual monitoring reports during operations will be prepared by the Operator in accordance with the format and scope to be agreed with ADB. The outline and scope of semi-annual environmental, health, safety and social monitoring report is in Attachment 12. These reports will be submitted to ADB for review and


disclosed on ADB website in accordance with the disclosure requirements under the SPS and ADB’s Public Communications Policy.

9.4 Institutional Arrangements, Implementation methods and efficiency indicators

9.4.1 Institutional Arrangements

547. In accordance with decisions of the Government of the RUz (Decrees of the Cabinet of Ministers of the RUz No.11 dated 03.04.2002 and No.16 dated 13.01.2003), state environmental monitoring system is functioning. Monitoring is a complicated system having many independent directions (on main environments, types of natural resources, observation (calculation) character). Presently, in the RUz rather developed system of environmental monitoring is functioning, which is unified into single State environmental monitoring (SEM).

548. State Environmental Monitoring (SEM) organization and functioning in the RUz are determined by appropriate normative base. In accordance with it, the following organizations are responsible for conducting monitoring:

State Committee for Nature Protection (SCNP) – monitoring of sources of pollution and land ecosystems;

Centre of Hydrometeorology Service (Uzhydroromet) – monitoring of atmosphere, surface water and soil pollution, background and hydrometeorology monitoring;

Ministry of Agriculture and Water Resources – monitoring of drainage effluent and irrigation water;

State Committee of Land Resources, Geodesy, cartography and land cadastre (Goskomgeodezkadastr) – monitoring of land resources;

State Committee of Geology and Mineral Resources — monitoring of groundwater and dangerous geologic processes;

Ministry of Public Health – sanitary-epidemiologic environment monitoring.

549. General coordination of ministries, agencies and economic management bodies activity coordination in the area of state environmental monitoring is performed by SCNP of the RUz. Responsible organizations involved in environmental monitoring, have appropriate material-technical base, network of observation stations and trained personnel.

9.4.2 Implementation methods and efficiency indicators

550. EMP mechanisms implementation is performed within the framework of several programs:

Plan of administrative and technical measures (annual) (Attachment No.6); Plan of nature protection and rational use of natural resources (annual) (Attachment No.7); Program of health, safety and environment protection (triennial) (Attachment No.8).

551. Besides these, more detailed EMP is performed within the framework of local production programs:

program of drinking and waste water quality control; program of working zones’ air control; plan-schedule of production and consumption waste collection and utilization; regulation of liquid and solid wastes reuse with purpose of rational use of natural resources; plans of internal environmental control during works including subcontractors;


552. All above programs have own schedules, allocated material and labor resources, persons responsible for implementation, strategy of specialized services attraction to strengthen EMP potential.

553. All programs have own efficiency indicators, analysis of program realization is continuous with obligatory documentation of intermediate and final results. Program realization is assessed based on final result, timely completion and expenses made. End indicators of program efficiency are as follows:

maintaining level of impact to EO within established norms; absence of incidents/accidents with environmental consequences; absence of appeals from state control bodies in field of environmental violations; approval of carried out ecologic policy from concerned persons and community.

554. Specific examples of such plan/program and results of its implementation within the Contract Area are presented as separate document (See Attachments 9 and 10).

9.5 EMP budget 555. The measures specified in the EMP have been included in the Operator’s Action Plans and Programs for health, safety and environment (See Attachments 6, 7 and 8).

556. Actual expenses of Operator for implementation of industrial safety and HSE measures in 2010 made USD 1.584 mln., only for implementation of environmental measures at Khauzak – Shady sections and Kandym Group of Fields there were spent USD 322.3 thousand that accounts for 1 (one) percent of Operator’s manufacturing costs for given sections.

557. The total Operator's EMP budget for the years 2010 to 2012 are shown in Table 49. List of planned environmental measures for 2011 (only for Khauzak – Shady sections and Kandym group of fields), as well as costs of their implementation are given in Table 50. It can be seen in the Table 50 that costs of environmental measures implementation for given sections make USD 492.4 thousand (that accounts for 1.2 % of manufacturing costs for given sections).

Table 49. Operator's EMP budget for 2010-2012

Activities Costs, USD mln

year 2010 year 2011 year 2012 Total Health, Safety 2.138 2.44 2.424 7.002 Environment 0.866 0.944 1.013 2.823 Social, Medical 0.919 1.579 1.685 4.183

Total 3.923 4.963 5.122 14.008


Table 50. Environmental Protection Plan for 2011 (for Khauzak – Shady sections and Kandym group of fields)

№ Arrangements Costs for

realization, 000 US $ in total

Quarterly Responsible person Note

1 2 3 4

1. Environmental safety and prudent management of natural resources

CAPEX 1.1 Ecological monitoring, including: 95,00 0,00 37,50 20,00 37,50

Head, Ecology Department

Realizing in accordance with the Industrial-Ecological monitoring programs approved by SCNP

1.1.1 area of KGF; 70,00 0,00 25,00 20,00 25,00

1.1.2 Kungrad field.

25,00 0,00 12,50 0,00 12,50

1.2 Costs for design of EIA, including: 126,30 49,00 0,00 46,50 30,80 Head, Ecology

Department

1.2.1 Design and state ecological expertise of EEA for construction BCS on Khauzak field;

20,00 0,00 0,00 0,00 20,00 Head, Ecology

Department Plan for 2012 (2011г- $20k USD, 2012г- $5k USD)

1.2.2 Development and state ecological expertise of EEA for treated waste water recycling facilities (underground water) Khauzak Shady field;

25,00 0,00 0,00 25,00 0,00


1.2.3 Development and state ecological expertise of EEA for shift camp of supervisory service under the construction of Kandym field;

12,00 12,00 0,00 0,00 0,00 Head, Ecology

Department

1.2.4 Development and state ecological expertise of EEA for administrative office in Bukhara for the Kandym field;

10,80 0,00 0,00 0,00 10,80 Head, Ecology

Department Plan for 2012 (2011г-$10,8k USD, $2012г-0,5k USD).

1.2.5 Development and state ecological expertise of EIS of development of West Shady field;

22,00 22,00 0,00 0,00 0,00


In accordance with the Letter of SCNP №8151 от 26.10.10 it is necessary to develop the EIS and receive approval of state ecological expertise





1 2 3 4

1.2.6 Development and state ecological expertise of EEA of development of West Shady field;

21,50 0,00 0,00 21,50 0,00

The development of EEA schedule in 2011 (instead of 2010) due to the necessity to develop the EIS

1.2.7 Development and state ecological expertise of EEA for construction works of exploration well Shege-3.

15,00 15,00 0,00 0,00 0,00 Head, Ecology

Department

The development of EEA schedule in 2011 (instead of 2010)

Total CAPEX 221,30 49,00 37,50 66,50 68,30

OPEX

1.3 Ecological monitoring of Khauzak-Shady field. 120,00 0,00 40,00 40,00 40,00


Realizing in accordance with the Industrial-Ecological monitoring programs approved by SCNP

1.4 Chemical’s delivery for waste recycling of drilling from Khauzak-Shady field.

89,12 36,18 17,65 35,29 0,00


Delivery of 300 tons of chemicals (150 mln. UZS) and 5 tons flocculating agent (1,5 mln. UZS) for waste recycling of drilling and Solid Domestic Wastes

1.5

Recycling of Solid Domestic Wastes from Center of Khauzak field production and shift camp of supervisory service under the construction of Kandym field.

4,00 1,00 1,00 1,00 1,00

Head, Ecology Department Service contract with LLC

"Olotobod".

1.6 Recycling of luminescent lamps of Center of Khauzak field production and Kandym.

1,00 0,25 0,25 0,25 0,25 Head, Ecology

Department Service contract with "Sitora".

1.7 Quality control of potable and waste water of Center of Khauzak field production. 18,00 4,50 4,50 4,50 4,50


Monthly quality control of potable and waste water realized by Bukharskiy State Specialized Inspection of





1 2 3 4

epidemiological control in accordance with the Industrial-Ecological monitoring programs approved by SCNP

1.8 Payments for environmental pollution (Bukharskiy region and Tashkent).

8,00 2,00 2,00 2,00 2,00 Head, Ecology

Department

Total OPEX 240,12 43,93 65,40 83,04 47,75

Administrative costs

1.9 Consulting services in the environmental safety sphere

8,00 2,00 2,00 2,00 2,00 Head, Ecology

Department Including the costs for expertise

1.10 Education, training and advanced training of employees in the environmental safety sphere 5,00 0,00 0,00 0,00 5,00


1.11 Receipt standards and legal acts regarding environmental safety

2,00 0,00 1,00 1,00 0,00 Head, Ecology

Department

1.12 Publishing of the guidelines regarding environmental safety

4,00 0,00 2,00 0,00 2,00


Production of regulations, guidelines, work manuals regarding the environmental safety

1.13 Supporting administrative office in Tashkent regarding environmental safety issues

12,00 3,00 3,00 3,00 3,00 Head, Ecology

Department Service contracts for sewage disposal and waste disposal

Total administrative costs 31,00 5,00 8,00 6,00 12,00

Total Environmental Safety: 492,42 97,93 110,90 155,54 128,05 Note: This Environmental Protection Plan will be updated every year.


10. Conclusions and Recommendations

558. The proposed Kandym Gas processing plant will adopt and implement modern technologies (e.g. superklause process, etc.) and other emission and pollution control measures to prevent significant environmental impacts, risks and hazards. An adequate EMP, including protection plan and monitoring program, has been prepared and committed to by the Operator for implementation, with specific budget and staff resources allocated. This includes air emission, water quality, soil and subsoil, background radiation, ecological resources (flora and fauna), and social aspects. No endangered species or protected areas are found in the Contract Area.

10.1 EIA Process 559. The environmental impact assessment of the proposed activity has been conducted in compliance with the current laws and regulatory system of the RUz and based on the results of researches and studies of environmental, economic, social and administrative aspects, as well as on analysis of the existing condition and specific characteristics of the environment in the Contract Area.

560. The baseline social and economic conditions in Karakul District, as well as social and economic aspects, related to development and performance of works on gas processing at the KGF have been considered.

561. The principal design projects have been analyzed (normally, as per existing productions), the potential sources of impact, type and specifications of impact, as well as objects of impact with regards to environment (including social and economic consequences) have been identified.

562. Alternative options of projected activities and process solutions have been considered.

563. The existing hazards caused by the proposed activity, both to operational personnel and population, and to the environment have been described; measures on prevention from potential adverse impacts to the environment have been outlined as well.

564. The forecast of potential effect of the proposed works to the condition of atmosphere, soil, underground and surface waters, flora and fauna as well as to the operational personnel has been developed.

565. Consultations were held with local government officials and nearby residents to provide information and viewpoints regarding the Project.

566. In general, the assessment of the impact to environment of important components of KGF has been outlined in the work; residual environmental effects have been identified; the assessment of social and economic changes have been introduced.

567. Considering the current stage of designing and difficulty to research accurately project designs at this stage in full, it is required to continue performing this work on other stages as well, specifically the EEA stage (Ecological Effect Assessment).

10.2 Results 568. The following conclusions are drawn:

the implementation of the project is directed to maintain security in supplying gas and liquid hydrocarbon for the Republic of Uzbekistan;

the objective of the project is to increase the production of hydrocarbons, to increase extraction of valuable components and deep gas refining without significant increase of development pressure to environment;


the implementation of the project, will strive to avoid resettlement, include the employment of local people, create convenient living and working conditions for operational personnel and minimize the environmental impact;

the risk of emergency situations resulting in considerable negative environmental or social consequences is not significant.

569. Therefore, the key conclusion is that the implementation of the projected activities will not affect the environment with long-lasting harmful consequences, provided that operational instructions, safety procedures, environmental measures are performed and observed as discussed and the EMP(see Table 47).

570. State Environmental Expertise for Environmental Impact Assessment (1 stage) of the project has shown their compliance with regulatory documents of Republic Uzbekistan (see Attachment 1 - Conclusion of the State State Environmental Expertise Committee for EIA of the GPP complex construction and Kandym group of field’s development). Proposed measures on decrease of negative impacts to the environment and rational use of natural resources are in compliance with proposed project.

571. In the following development stages (during Ecological Effect Assessment) it is required to specify parameters of impact to environment, to develop detailed maximum permissible requirements of impact, to continue development of environmental protection measures and performance of environmental monitoring and control

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