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Yoon urges speedier cooperation as S. Korean firms eye $6b deals in Turkmenistan

Daewoo E&C, Hyundai Engineering pursue wider business opportunities

June 11, 2024 - 15:43 By Son Ji-hyoung
President Yoon Suk Yeol (left) and Turkmenistan's People's Council Chair Gurbanguly Berdymukhamedov shake hands at a business forum held in Ashgabat, Turkmenistan. (Yonhap)

ASHGABAT, Turkmenistan -- President Yoon Suk Yeol on Tuesday called for speedier economic cooperation with Turkmenistan, as South Korean companies were working to secure up to $6 billion in construction bids in the Central Asian country's rich gas sector.

Speaking at a business forum to mark the South Korean leader's state visit to Turkmenistan, Yoon said the two countries have many opportunities for collaboration, stressing Turkmenistan's status as the world's fourth-largest holder of natural gas reserves and South Korea's expertise in industrialization and advanced technology.

"Cooperation in the energy resource sector between our two countries needs to be further advanced. I hope that South Korean companies will continue to actively participate in Turkmenistan's plant projects," he said at the forum attended by business leaders of the two countries and government representatives.

Yoon said that the two countries were at the final stage of forging an investment protection agreement, adding that such an effort is to establish an institutional foundation that allows companies to invest with confidence.

At the forum held on the second day of Yoon's visit, Turkmenistan's "national leader" and Chair of the People's Council of Turkmenistan Gurbanguly Berdymukhamedov also highlighted $11 billion worth of projects in the country carried out by South Korean firms, including construction projects related to gas plants and vehicle purchase deals.

Among them are the $5 billion worth of plant construction bids in Turkmenistan in the past decade, the most from South Korea's perspective among the Central Asian countries.

Hyundai Engineering signed two new deals Monday -- one to build a new natural gas processing facility for desulfurization in eastern Turkmenistan and the other to restore the operation of the Kiyanly Polymer Plant to full capacity on the Caspian coast in westernmost Turkmenistan.

The new deal will allow Hyundai Engineering to build its second desulfurization facility in the Galkynysh Gas Field in Turkmenistan's Mary province, some 350 kilometers east of Ashgabat, following another built in 2009.

Hyundai Engineering's reconstruction of its Kiyanly Polymer Plant will help bring it back into action. Work there has been suspended since last year due to an accident by a local operator. Before the accident, the plant had used natural gas to produce some 380,000 metric tons of polyethylene and 81,000 metric tons of polypropylene since its commissioning in 2018.

If the reconstruction is successful, Hyundai Engineering will be tasked with operating and managing the facility through a follow-up deal, according to Park Chun-sup, senior presidential secretary for economic affairs.

Park Chun-sup, senior presidential secretary for economic affairs, speaks to reporters at a briefing in Ashgabat, Turkmenistan, on Monday. (Yonhap)

Meanwhile, Daewoo Engineering & Construction is seeking a bid to build two plants, producing urea and ammonia, in Kiyanly on the Caspian coast.

Combined, the three deals could be worth up to $6 billion to South Korean companies, Park said.

Park highlighted the Turkmen government's new road cleaning vehicle renewal bid starting this year. He noted that car exports, including buses, taxis, military vehicles and official state cars, made up over half of South Korea's $17 million exports to Turkmenistan.

Shortly before Yoon's state visit, the two countries agreed to more than double the number of flights each week between Seoul and Ashgabat, from two to five.

"Turkmenistan is a transport hub that serves as a gateway to Europe via the Caspian Sea, so there is much room for cooperation," Park said.

Park Sang-woo, minister of land, infrastructure and transport, also highlighted that Turkmenistan has been seeking to revamp an old railroad stretching over 1,100 kilometers from Turkmenbashi of westernmost Turkmenistan to Turkmenabat in the east, which would herald new business opportunities for South Korean companies to join in the project.

The two countries are jointly building two multipurpose carriers following a $41 million shipbuilding deal signed in September, involving Koryo Shipbuilding Industry Technology, based in Yangsan, South Gyeongsang Province.