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ASHGABAT, May 30 (Reuters) - Turkmenistan, holder of the world's fourth-largest natural gas reserves, said on Friday it had secured a total of $2.5 billion in loans from Japan's and South Korea's export credit banks for construction of a gas chemical complex.
Japan's Toyo Engineering Corp said this month that its consortium with three South Korean firms had been awarded a $3 billion contract for the complex in western Turkmenistan by state concern Turkmengas.
"The State Bank of Foreign Economic Affairs of Turkmenistan has struck a credit agreement for $700 million with Japan Bank for International Cooperation and another one worth $1.8 billion with Korea Eximbank for 10 years to finance construction of the plant in the Balkan region of the country," said a government official, who declined to be identified.
Turkmengas will finance the rest of the contract.
The economy of Turkmenistan, a Central Asian nation of 5.5 million, has grown at an annual rate exceeding 10 percent in recent years, owing mainly to rising natural gas exports to China via a pipeline launched at the end of 2009.
But the country also aspires to diversify the economy, investing billions of dollars in construction of plants to yield value-added oil and gas products.
Toyo's partners in the consortium are Hyundai Engineering Co Ltd, Hyundai Engineering & Construction Co and LG International Corp.
The complex, to be built in the Turkmenbashi district near the Caspian Sea, will produce ethylene, high-density polyethylene, and polypropylene from natural gas produced on the Caspian Sea shelf, Toyo said after winning the contract.
Facilities, to be completed in 2018, include a gas separation unit with capacity of 5 billion cubic metres per year, an ethylene production unit with capacity of 400,000 tonnes per year (tpy) and a polypropylene production unit with 80,000 tpy capacity. (Reporting by Marat Gurt; Writing by Dmitry Solovyov; Editing by Dale Hudson)