South Korean Firm to Build Petrochemical Complex in Qatar
Text of report in English by South Korean news agency Yonhap
[By Nam Kwang-sik: "Honam Petrochemical Signs Deal To Build Petrochemical Complex in Qatar"]
Seoul, July 19 (Yonhap) – South Korean petrochemical producer Honam Petrochemical Corp. said Thursday it has sealed a deal to build a petrochemical complex with a subsidiary of the state-run Qatar Petroleum Co. in southeastern Qatar.
Honam Petrochemical and Qatar Petroleum unit Qatar Intermediate Industries Holding Co. signed the final contract for the complex on June 29 after a preliminary deal in December 2005, Honam Petrochemical said in a filing with the Korea Exchange.
The petrochemical complex will be built in Mesaieed, an industrial city approximately 40 kilometres south of Doha, the capital of Qatar, Honam Petrochemical said.
Honam Petrochemical said it will spend an estimated US$390 million for a 30 per cent stake in the complex, into which $2.6 billion will be invested, with the Qatari company holding the rest.
The two companies plan to set up a joint venture in early 2008 for the construction of the complex and predict commercial production by the complex will begin in late 2011, Honam Petrochemical said.
The company will be in charge of the construction of plants that produce ethylene with the raw materials ethane and naphtha, as well as 700,000 tons of polypropylene a year, 600,000 tons of styrene monomer and 220,000 tons of polystyrene.
“Honam Petrochemical is the first South Korean petrochemical company to advance into the Middle Eastern petrochemical market. We expect that the complex will allow us to diversify production bases and secure cost competitiveness using low-priced natural gas,” the company said.
Shares of Honam Petrochemical rose 6.56 per cent to close at 130,000 won on the Seoul bourse.
Honam Petrochemical is a unit of the South Korean family-run conglomerate Lotte Group.
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