GARABOGAZ, Turkmenistan Aug 18 Japan's Mitsubishi Corp. and Turkey's Gap Insaat on Monday laid the foundation of a $1.3 billion plant to produce carbamide in Turkmenistan, which plans to gain added value by using its natural gas to produce the fertiliser for export.
Turkmenistan holds the world's fourth-largest reserves of natural gas. Its economy has grown by more than 10 percent a year in recent years, owing largely to rising gas exports to China via a pipeline built in late 2009.
But the government of the Central Asian country has also invested billions of dollars in projects to develop other sources of exports.
Under this programme, the new plant will process natural gas to produce annually 1.1 million tonnes of the fertilizer carbamide, which is also known as urea, for a global market.
"The plant is entirely designed for exports. Carbamide delivered from here will be loaded onto ships and then sent to overseas nations," Turkmen President Kurbanguly Berdymukhamedov said at a lavish ground-breaking ceremony in a desert area some 800 km (500 miles) west of the capital Ashgabat.
The plant, which will employ 1,000 workers, will be built near the Garabogaz Bay in the Caspian Sea. The fertiliser will be shipped mainly to markets in Europe and the Far East, local government officials have said.
The $1.3 billion cost of the project will be 85 percent financed by a loan from Japan Bank for International Cooperation and the rest by the Turkmen government.
Also under the diversification plan, Berdymukhamedov in June concluded two large-scale agreements with South Korea's LG International Corp and Hyundai Engineering to build two plants worth a total of $4 billion to process gas into other products.
One plant will produce 600,000 tonnes of liquid fuels per year, and the other will produce 290,000 tonnes of polyvinyl chloride and 190,000 tonnes of hydrate of sodium a year, a government official said at the time. (Writing by Dmitry Solovyov; editing by Jane Baird)