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8 September 2011
POSCO says investment in Kazakh power plant conditional on fixed-price gas supplies

ASTANA. Sept 8 (Interfax) - South Korea's POSCO is ready to invest in the construction of the Kandyagash gas turbine power plant (GTPP, in Aktobe region, western Kazakhstan) provided that it has guaranteed 20-year gas supplies at a fixed price.

"We have recently held talks with a number of investors, including the South Korean corporation POSCO. POSCO signed a memorandum with the akim's [governor's] office of the Aktobe region, in which the corporation stated its willingness to become a shareholder of the project and pay $60 million to the registered capital. The corporation undertook to obtain the rest $140 million through foreign banks. POSCO's main condition is the closure of a contract for the supply of 200 million cubic meters of gas per year during twenty years at a fixed price, which will be stated in the concession contract signed by the government," the General Director of Kandyagash GTPP JSC Askarbek Mamyrbayev said at a meeting of the Coordination Council for the Implementation of the State Forced Industrial and Innovative Development Program in the Aktobe region.

The GTPP project in Kandyagash was devised three years ago. The cost of the project is 30.15 billion tenge (146.87 tenge /$1). The proposed capacity of the plant is 952.2 million kWh per year, Mamyrbayev said.

According to the akim's office, the plant will partially solve the region's energy shortage problem worsened by the industry growth. The Aktobe region currently imports one third of its electricity.