LG Chem abandons $4.2bn petrochemical project in Kazakhstan

By bne IntelliNews January 27, 2016

South Korean LG Chem has decided to abandon a $4.2bn project to build a petrochemical complex in Atyrau, western Kazakhstan. The company cited difficult prospects for a market turnaround in the short term as the reason for its decision.

Given the turbulences on the Chinese market and economic crisis in Russia, LG Chem might be only the first among international companies seeking to at least postpone the implementation of major energy projects in Kazakhstan. This is especially true for the petrochemical industry, the output of which was planned to be exported to China. The other issue is that Kazakhstan may face challenges in attracting energy companies to its market since another major energy resources holder - Iran - became open for business in the middle of January, after part of the Western sanctions were lifted.

LG Chem reached a parity basis agreement on the petrochemical complex in 2011 with Kazakhstan Petrochemical Industries. Then, the company planned the construction of ethylene and polyethylene plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively.

LG Chem is the largest Korean chemical company, headquartered in Seoul. In 2014, it was ranked 13th largest chemical company in the world by sales.

Related Articles

US investor reportedly to replace CEFC in refinery deal with KazMunayGas

A US investor backed by Overseas Private Investment Corporation (OPIC) might replace troubled China Energy Company Limited (CEFC) and take over 51% of KazMunayGas International ... more

ADB sees general Central Asia slowdown in 2018

The Asian Development Bank’s (ADB’s) Asian Development Outlook anticipates a general slowdown across the Central Asian region, with the exceptions of Uzbekistan, where the development bank ... more

Kazakhstan mulls ban on cryptocurrencies

Kazakhstan’s central bank is considering a ban on cryptocurrency use, exchanges, and mining, Daniyar Akishev, the chairman of Kazakhstan’s National Bank, told ... more

Dismiss