South Korea's LG, Hyundai clinch $4 bln deal with gas-rich Turkmenistan (updated)

LX International

20/06/2014 17:55

(Changes dateline, adds detail, background) 
    ASHGABAT, June 20 (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. 
 
 (Reporting by Marat Gurt; Writing by Dmitry Solovyov; editing 
by Keiron Henderson) 
 ((dmitry.solovyov@thomsonreuters.com)(+7 727 3300 787 x 
705)(Reuters Messaging: 
dmitry.solovyov.thomsonreuters.com@reuters.net)) 
 
Keywords: GAS TURKMENISTAN/SOUTHKOREA