(Korea Times) – On Thursday, LG Chem said it plans to jointly build a petrochemical complex with Kazakhstan Petrochemical Industries (KPI) within a specialized economic zone in Atyrau, Kazakhstan. This is the first time for Korean companies to take a leading role in oil and gas-related business fields in the Central Asian country.

The total investment will reach $4 billion and the 50:50 legal entity will be launched by the end of this year, LG said in a statement. In the investment breakdown, LG Chem and KPI will spend US $600 million each and the remaining $2.8 billion will be financed via project financing (PF), said senior LG spokesman C.S. Song.

Korea EXIM Bank and Korea Trade Insurance Corporation (KTIC) will take an advisory role for the financing of the plant. “LG Chem will fully handle management that includes the construction of the plant, operation and product sales and that’s very rare because LG is a non-Kazakhstan company,” said Song, adding the Kazakhstan government gave credit to LG’s experienced management know-how.

Investment will start from 2012 and the complex will go on-line from 2016 with the annual revenue target set at $1.4 billion, the statement said. The plant will be on a tract of 3.8 million m² within the economic zone and annual output capacities of ethylene and polyethylene could be 840,000 and 800,000 tons, respectively.

“LG Chem sees the ethane-based plant as a potential overseas outpost so that it can compete with the Middle East in terms of cost-competitive petrochemical business in the future,” Song said.

President Lee Myung-bak, along with LG Chairman Koo Bon-moo and LG Chem chief executive Kim attended the signing ceremony with the Kazakhstan President Nursultan A. Nazarbayev and Dauren Yerdebay, chairman of KPI’s board of directors in Astana, the country’s capital.

LG Chem is the world’s top-tier rechargeable battery maker for electric vehicles. More than 10 global carmakers including General Motors (GM) and Ford of the United States and Renault of France are among its clients.