South Korean companies to finance 2 large projects in Kazakhstan for $9 bln


The South Korean companies will participate in the financing the 2nd stage of construction of the gas chemicals complex in the Atyraus region (the 1st stage of the project is realized on the loans from China). The respective memorandum was signed on August 25th 2011 during the visit of the President of South Korea, Lee Myung-bak, to Kazakhstan. 
Moreover, an agreement in the sphere of the development, financing, projecting, construction, operations and technical maintenance of the Balkhash thermal power plant was signed. The President of Kazakhstan, N. Nazarbaev, at the meeting with the Korean President said the total cost of the projects would make up $9 bln.
Mr. Lee said that the “successful realization of such large projects as the construction of the thermal power plant and gas chemicals complex, and also the exploration of the oil deposit Zhambyl might become an example for expansion of cooperation in other spheres”. “Our Government will also contribute for a successful realization of these projects”, Mr. Lee said.
A JV will be founded for the realization of the 2nd stage of gas chemicals complex construction in the Atyraus region. Now the operator is “Kazakhstan Petrochemical industries Inc” TOO.
The first stage of the project costs $2 bln, “Sinopec Engineering” is the general contractor. The plant will be able to produce up to 500 thousand tons of polypropylene a year.
In the framework of the 2nd stage with $4.3 bln value it is planned to produce 800 thousand tons of polyethylene a year. On May 30th 2011 a memorandum of cooperation between “Kazakhstan Petrochemical industries Inc” TOO and “LG Chemicals” was signed. The preliminary financing structure: loans (70%) - $3.01 bln and own capital (30%) - $1.29 bln. The stakes in the project are equal – 50% each ($645 mln). LG Chemicals undertakes to organize the main part of the debt financing of $2.5 bln with the assistance of the Korean Government. 
Korea Electric Power Corp and Samsung will participate in the construction of the thermal power plant of 2,640 mW capacity. The stake of Kazakhstan in the project is 25% plus 1 share. The Korean companies purchased 75% minus 1 share respectively. The construction of the thermal power plant started a year ago – in the summer 2010. The 1st and 2nd energy blocks are planned to be put into operation in 2013, the next two – in 2016, Panorama reports.
Translated by Galiya Musabekova

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