March 19 (Bloomberg) -- The Development Bank of Kazakhstan will wait to finance a local $6 billion natural-gas chemical plant as the project's strategic partner, LyondellBasell Industries AF SCA, seeks to reorganize.
"The status of LyondellBasell, a planned strategic investor for the project, is unclear and we want understanding of this issue before making a decision to finance," Arman Kassenov, managing director at the state-owned bank, said in an interview in Astana yesterday. "The strategic partner is necessary for the project, especially from the point of sales."
The gas chemical complex will have capacity to produce 800,000 metric tons of polyethylene and 450,000 tons of polypropylene a year when completed in 2014, according to KazMunaiGaz National Co., which owns 50 percent of the venture. KazMunaiGas Exploration Production, a London-traded unit of KazMunaiGaz National, owns the other half.
Export-Import Bank of China agreed to help finance the construction of the plant, the Kazakh National Wellbeing Fund Samruk-Kazyna said in December, without giving the amount on China's contribution.
The project may be divided into two parts, polypropylene and polyethylene, to ease financing, Kassenov said.
Natalya Baigozhina, an Astana-based spokeswoman for KazMunaiGas EP, declined to immediately comment, as did Asel Elimesova, a spokeswoman for KazMunaiGaz National.
LyondellBasell filed for bankruptcy in April last year. The Rotterdam-based chemical company said on March 8 that it plans to exit bankruptcy April 30, rejecting a $14.5 billion purchase offer by India-based Reliance Industries Ltd.
David Harpole, a LyondellBasell spokesman in Houston, said in an e-mail today that the company has informed the partners that it has withdraw from the project.
"Our notification at this time will enable our partners to move forward without our involvement," he said. "As the company draws closer to emergence from chapter 11 in the United States, we must act consistent with our new capital requirements and business plan, neither of which includes this project."
