Kazakhs plan $5 bln petrochemical plant

ASTANA, May 17 (Reuters) Kazakhstan's state energy firm Kazmunaigas will start building a .2 billion petrochemical plant near the giant Kashagan oil field in December, a Kazakh energy ministry official said on Thursday.

''We in Kazakhstan have large amounts of gas with ethane presence of between 13 to 16 percent. So it makes perfect sense to build a petrochemical complex,'' said Raushan Sarmurzina, head of the ministry's technology development department.

The plant would annually produce 1.2 million tonnes of ethylene, polyethylene and polypropylene and would process gas from the giant Tengiz oil field, led by U.S. Chevron, in its first stage.

It would later also process gas from the huge offshore Kashagan field, led by Italy's Eni.

Netherlands-based Basell Holdings BV, a big polypropylene producer, is named as a strategic partner in energy ministry documents detailing the project.

The plant is expected to be built in three to five years by an operating company, Kazakhstan Petrochemical Industries, set up by KazMunaiGas and SAT&Company, a private Kazakh company with petrochemical and airlines interests.

Sarmurzina said the project will be financed by KazMunaiGas itself, the government and investors.

REUTERS DKS RS1705