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Project financing of Ustyurt gas chemical complex named as intl deal of the year

1 January 2013

http://uzdaily.com of 1/1/2013 - A project financing of the project Ustyurt gas chemical complex has been named as international deal of the year, the press service of Uzbekneftegaz said.

Thomson Reuters, a global leader in business analytics, publishes Project Finance International (PFI), which analyses global project financing market.

In December 2012, Project Finance International 2012 Year Book announced the winners of annual award for 2012. The book also analyses global project financing deals.

Projects from Australia, Great Britain, Germany, France, Norway, USA, Malaysia, Uzbekistan and Russian Federation in energy, oil and gas mining, oil and gas chemistry and transported entered to Top 10 projects.

The project "Construction of Ustyurt gas chemical complex at the base of Surgil complex" was named international project of the year in nomination "Deal of the year in oil and gas chemistry", which is acknowledgement of its uniqueness and innovation, as well as great potential of Uzbekistan in realization of large investment projects based on project financing.

Project Finance International noted that Ustyurt project is the first international project financing deal in oil and gas chemical complex of Uzbekistan. It said that the deal is largest project financing in Central Asia and largest in gas chemistry projects in CIS.

The project "Construction of Ustyurt gas chemical complex at the base of Surgil complex" was developed in cooperation between Uzbekistan and South Korea. The project is endorsed by the governments of two states.

A package of financial documents worth US$2.54 billion was signed in May 2012 and the documents will be effective for 16 years. Korean Export-Import Bank issued US$1 billion to project financing, China Development Bank - US$250 million, Asian Development Bank - US$125 million, and National Bank of Uzbekistan - US$100 million. Korea Trade Insurance Corporation provided insurance coverage for US$800 million, EKN (Sweden) - US$140 million and Hermes (Germany) - US$124 million.

Nine commercial banks participated in financing of the project. They are Korean Financial Corporation, Korean Development Bank, ING Bank, Siemens Bank, Credit Suisse, Bayern LB, KfW IPEX, Nordea and Swedish bank SEK.

Uzbekneftegaz said that the awarding ceremony will be held on 30 January 2013 in London, Great Britain.

Uz-Kor Gas Chemical is a project company. Uz-Kor Gas Chemical was founded by Uzbek and Korean companies in May 2008 to develop, finance, construct and exploitation of integrated gas and oil processing project in Ustyurt region of Uzbekistan.

Uzbekneftegaz owns 50% stake in the joint venture, while Uz-Kor Gas Chemical Investment holds 50% share. Korea Gas Corporation (KOGAS), Honam Petrochemical and STX Energy are Korean founders of the venture.

Main resource base of the project is gas and gas condensate, extracted at Surgil field, license for development of which was presented to Uz-Kor Gas Chemical.

Uz-Kor Gas Chemical will produce and sell gas in market of Uzbekistan and produce gas chemical goods: polyethylene of high density, polypropylene and pyrolized gas and mazut for internal and external markets.

It is expected that Ustyurt Gas Chemical Complex will be commissioned in early 2016.

The complex will annually process 4.5 billion cubic meters of gas and produce 4 billion tank gas, 400,000 polyethylene and 100,000 tonnes of polypropylene, as well as 100,000 tonnes of pyrolized petroleum.

The project cost is about US$4.16 billion. Foreign banks issued US$2.5 billion, while founders of Uz-Kor Gas Chemical will allocate US$1.41 billion. The Fund for Reconstruction and Development of Uzbekistan will issue US$100 million.