LG Chem, South Korea's largest chemical company, signed a deal worth at least $4 billion on Thursday to develop a large petrochemical complex in Kazakhstan it says will rival Middle Eastern suppliers. LG Chem said it would construct the complex near the western Kazakh city of Atyrau as part of a 50-50 joint venture with Kazakhstan Petrochemical Industries (KPI). Commercial production is scheduled to begin in 2016, the company said in a statement.
The investment was among several contracts signed during a visit by South Korean President Lee Myung-bak to Kazakhstan, the largest of the former Soviet economies of Central Asia. "A number of documents are being signed today, the most important of which will make the Republic of Korea one of the main investors in Kazakhstan," Kazakh President Nursultan Nazarbayev told his South Korean counterpart.
Kazakhstan, which holds 3 percent of the world's recoverable oil reserves, has attracted more than $120 billion in foreign investment since gaining independence two decades ago. Much of its future investment is aimed at processing of raw materials. The South Korean investment forms the second phase of an even larger project to develop a major petrochemical complex near Atyrau. Chinese company Sinopec Engineering is undertaking construction of the first phase, worth around $2 billion.
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