South Korea's LG, Hyundai clinch $4 billion deals with gas-rich Turkmenistan
ASHGABAT (Reuters) - South Korean industrial conglomerates LG International and Hyundai Engineering will build gas processing plants in Turkmenistan worth a combined $4 billion, Turkmen President Kurbanguly Berdymukhamedov said on Friday.
"Turkmenistan sees a long-term partner in South Korea. And today we concluded two large-scale agreements worth a total of $4 billion," Berdymukhamedov told journalists after holding talks with his visiting South Korean counterpart Park Geun-hye.
The contract to build two processing plants was signed by Turkmen state gas company Turkmengas, LG International Corp 001120.KS and Hyundai Engineering Co. HYENG.UL following the talks.
"For the first time in the history of our diplomatic relations, the president of South Korea has visited Turkmenistan. We share the opinion with the president of Turkmenistan that we should increase the volume of our mutual trade and investments," Park said through an interpreter.
Berdymukhamedov, who has sweeping powers in his Central Asian nation of 5.5 million, has in recent years overseen rapid economic growth exceeding 10 percent annually, largely on the back of rising natural gas exports to China via a pipeline launched in late 2009.
Turkmenistan holds the world's fourth-largest natural gas reserves.
China has rapidly supplanted the Muslim nation's former imperial master Russia as the main importer of its gas. Next-door Iran buys insignificant amounts of natural gas.
While alternative gas export routes exist mainly on paper, Berdymukhamedov has poured billions of dollars into projects aimed at processing the country's hydrocarbon riches into value-added products.
Under the contracts signed on Friday, the South Korean firms would build a $2.5 billion gas-to-liquids plant with an annual capacity of 600,000 tonnes, and a $1.5 billion plant to produce 290,000 tonnes of polyvinyl chloride and 190,000 tonnes of hydrate of sodium a year, a Turkmen government official said.
The official, who declined to be named, told Reuters the terms of financing had yet to be finalised. "It is planned to attract mainly South Korea's investments," he said.
Berdymukhamedov said in his speech that to date South Korean firms had taken part in nine investment projects in Turkmenistan's oil and gas sector worth a total of $5.5 billion.