China has agreed to invest about 26.7 billion yuan in building a comprehensive petrochemical base in the Aktebu-Pennsk region of Kazakhstan in Central Asia.
The Chinese company is Tianjin Bohai Company, a unit of Tianjin Bohai Chemical Group. Representatives of the company recently signed a project cooperation agreement with local officials from Kazakhstan in Beijing.
The project plan is divided into two phases, the first phase can be used to produce methanol as raw material after the completion of the project. The second phase will build an ethylene plant with an annual capacity of 300,000 tons and two other polyethylene and polypropylene plants with an annual capacity of 300,000 tons.
The Kazakh side is expecting that the project will provide 3,000 new jobs after its completion in 2021. The target markets for petrochemical products are China and Kazakhstan, but also supply neighboring countries.
The large Central Asian project that China took over was the one that other foreign investors did not dare to enter. Two years ago, South Korea's LG Chemical canceled its long-term plan to invest 800,000 tons of PE in Kazakhstan. LG Chem, a unit of the LG Group, pulled out of a joint venture in Attyana, claiming that investment costs have risen too fast as the price of oil goes all the way down.
LG Group said in early 2016 that it will shift its investment to "more promising" commercial areas.
The industry generally believes that the Aktuellesbosch project is related to China's "One Belt, One Road" development strategy.