Turkmenistan starts up new petrochemical hub

26 September 2018, Week 38, Issue 1000

A new petrochemical complex on the Turkmen shore of the Caspian Sea has sold its first batch of finished products.

The state-operated Kiyanly plant, located in Turkmenistan’s eastern Balkan Province, was completed in July and has undergone two months of commissioning work. According to a report on September 19 by the government-run Nebit Gaz newspaper, the plant has sold 11,782 tonnes of high-density polyethylene (HDPE) and 2,309 tonnes of polypropylene (PP) at auction on Turkmenistan’s state commodities exchange. The volumes were bought by companies from countries within the Commonwealth of Independent States (CIS).

At full capacity, the facility will process 5 bcm per year of untreated gas from offshore fields operated by Malaysia’s Petronas. In turn, it will produce up to 381,000 tonnes of HDPE and 81,000 tonnes of PP per year, along with 4.5 bcm of commercial gas supplies. Petrochemical products will be exported at a specially designed terminal nearby. The terminal was commissioned as part of a US$1.5 billion port project.

Japan’s Toyo Engineering and South Korea’s Hyundai Engineering and LG won a contract to build the plant in 2014. At the time, the project’s estimated price tag was US$3 billion. The Japan Bank for International Co-operation (JBIC), the Export-Import Bank of Korea (KEXIM) and a syndicate of financiers from various countries helped cover this sum with a US$2.5 billion loan.

The Kiyanly plant is one of a number of projects in Turkmenistan aimed at converting the country’s gas into higher-value goods that can be exported.

Turkmenistan holds an estimated 19.5 tcm in proven gas reserves, but it has been unable to establish a large enough market for the resource overseas. Russia, once the main buyer of Turkmen gas, halted shipments in early 2016, while Iran has also scaled back supplies because of a dispute over debts. China is Turkmenistan’s only major gas customer left.

Earlier this month Turkmenistan completed an expansion project at its largest power station, the 1,574-MW gas-fired Mary-3 plant. This will enable increased electricity exports to Afghanistan, according to the government. And just last week, a new US$1.5 billion nitrogen fertiliser plant was launched in Garabogaz, on the Caspian coast. Meanwhile a US$1.7 billion gas-to-liquids (GTL) complex is due to start up in December at Ovan-Depe, in the central Ahal region.

Joseph Murphy

Edited by

Joseph Murphy


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