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.
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