ASTANA (TCA) — LG Chem, South Korea’s largest chemical company, said it has decided to scrap a plan to jointly build a $4.2 billion petrochemical plant in Kazakhstan due to the continued slump in global oil prices, The Korea Times reported late in January.
“The Kazakhstan project lost its luster because of a steep increase in facility investment amid growing uncertainty. On a business front, LG’s top management reached a consensus that it wasn’t promising,” the company said in a statement.
Back in 2011, LG Chem set up a 50-50 joint venture with Kazakhstan Petrochemical Industries (KPI) to jointly invest $4.2 billion to construct a polyethylene plant to produce 800,000 tons of products per year.
KPI is 51-percent owned by KazMunayGas Exploration Production, an upstream oil production unit of Kazakhstan’s state oil and gas company KazMunayGas, and the privately owned company SAT owns the remaining 49-percent stake.
The plant was planned to be built near the western Kazakh city of Atyrau.
“LG Chem has no option but to invest in businesses that are more promising and have growth potential. The money that will be saved from the exits will be used to strengthen the company’s strength in electric vehicle batteries, filters and agricultural chemicals, which we’ve identified as new revenue streams,” C.S. Song, head of LG Chem’s public relations office, said.
