President of Uzbekistan Islam Karimov approved sources of financing of construction of Ustyurt Gas Chemical Complex in northern-western Uzbekistan.

In line with the resolution, the project with the cost of US$4 billion will be financed due to loans of international financial institutions based on project financing at the size of US$2.52 billion, resources of Uz-Kor GasChemical at the size of US$1.41 billion and loan of the Fund for Reconstruction and Development of Uzbekistan - US$100 million.

In line with the document, Uzbekneftegaz national holding company will invest US$705.43 million, including property, while Kor-Uz Gas Chemical Investment Ltd. - US$705.43 million.

As reported earlier, the Asian Development Bank has approved a loan and political risk guarantee totaling up to $400 million to Uz-Kor GasChemical for construction of the complex.

In February 2008, Uzbekneftegaz and South Korean consortium created a joint venture UzKorGasChemical for construction of the Ustyurt Gas-Chemical Complex on the base of Surgil deposit. The consortium included Kogas, Lotte Daesan Petrochemical Corp. (in 2009, it was replaced with Honam Petrochemical), LG International Corp., SK Gas and STX Energy.

Recently, Korea Gas Corp announced that it decided to buy a 362.3 billion Korean won (US$323.04 million) stake in a Malaysian registered company, Kor-Uz Gas Chemical Investment Ltd, to participate in a project in Surgil, Uzbekistan.

After the purchase, Korea Gas Corp will hold a 45% stake in the Kor-Uz, while South Korea's Honam Petrochemical Corp will have a 45% and STX Energy will hold a remaining 10%.

According to the feasibility study, the complex will annually process 4.5 billion cubic meters of gas, and produce 400,000 polyethylene and 100,000 tonnes of polypropylene, as well as 100,000 tonnes of pyrolized petroleum. Singapore's CMAI prepared the feasibility study of the project. The construction term is 38 months.

The resource base of the project is Surgil, Vostochniy Berdah-Uchsay and Severniy Berdah fields. Surgil field is the largest of them. Its reserves, according to the Uzbek side, make up about 120 billion cubic meters of gas.



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