Yoon, on State Visit to Turk, Expects Additional $6 Billion Orders for Korean Companies

President Yoon Suk-yeol and President Serdar Berdimuhamedow of Turkmenistan shake hands after a joint press conference following the South Korea-Turkmenistan summit at the Presidential Palace in Ashgabat, Turkmenistan, on the afternoon of the 10th (local time).
[Photo by Yonhap News]

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With President Yoon Suk-yeol's state visit to Turkmenistan, domestic companies are expected to achieve approximately $6 billion (8.256 trillion KRW) worth of orders in the energy plant sector. Considering that the cumulative order amount from domestic companies in Turkmenistan has been about $10 billion so far, this new order achievement is remarkable and is expected to serve as a signal for more active trade and investment between the two countries in the future.

Kim Tae-hyo, the First Deputy Director of the National Security Office, held a briefing on the evening of the 10th (local time) at the press center in Ashgabat, the capital of Turkmenistan, stating, "The two heads of state expect trade and investment between the two countries to expand based on the Trade and Investment Promotion Framework (TIPF) signed this time," and added, "They agreed to strengthen cooperation in energy, industry, trade, economy, and the green digital economy sectors going forward."

In particular, Deputy Director Kim emphasized, "The two presidents reached a consensus that successful cooperation cases in the energy plant sector, which is the core axis of cooperation, should continue and expand further," and "So far, our companies have secured about $10 billion in orders in the energy plant sector in Turkmenistan, and it is presumed that the additional order amount during this state visit will also be substantial."

According to the Presidential Office, this visit has raised expectations for another large export through Hyundai Engineering's signing of the 'Basic Agreement for the 4th Desulfurization Facility at the Galkynysh Gas Field' and the 'Phase 2 Cooperation Agreement for the Normalization of the Kiyanly Polymer Plant' with Turkmenistan's Gas Company and Chemical Company, respectively. Additionally, favorable conditions have been created for Daewoo E&C's order for a urea and ammonia fertilizer plant, leading to an expected total order volume of $6 billion across three projects.

Hong Hyun-sung, CEO of Hyundai Engineering (left), and the Chairman of Turkmenistan Gas Corporation signed the basic agreement (F/A) for the 4th desulfurization facility of the Galkynysh gas field on the 10th (local time) at the Ashgabat Presidential Office.
[Image source=Yonhap News]

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Park Chun-seop, Senior Secretary for Economic Affairs at the Presidential Office, said at a subsequent local briefing, "This year marks the meaningful 15th anniversary since the start of plant cooperation between the two countries," and added, "With the signing of agreements for two plant projects this time, plant cooperation between the two countries has been restarted."

Senior Secretary Park emphasized, "Including the 4th desulfurization facility project at the Galkynysh Gas Field, the Kiyanly plant normalization project, and the urea and ammonia fertilizer plant project, orders worth about $6 billion are expected," and "With Hyundai Engineering signing the basic agreement for the 4th desulfurization facility at the Galkynysh Gas Field, a green light has been turned on for the second order in 15 years since the first desulfurization facility order in 2009."

The two governments also signed the Trade and Investment Promotion Framework (TIPF) during this state visit. Senior Secretary Park explained, "TIPF is an institutional mechanism for strategic cooperation not only in trade and investment but also across industry and energy in response to changes in the global trade order," and said, "The Korea-Turkmenistan TIPF signed this time is the 23rd TIPF we have concluded, and Turkmenistan is the third Central Asian country to sign a TIPF after Uzbekistan in September 2023 and Kazakhstan in October 2023."

Senior Secretary Park added, "Since Turkmenistan has not yet joined the World Trade Organization (WTO), it was not easy for domestic companies to access the local market, but with this agreement, a stable trade and investment environment centered on industry, trade, and energy between the two countries has been established."

He also mentioned, "A 'Joint Cooperation Committee Promotion MOU' was signed between our Ministry of Trade, Industry and Energy and Turkmenistan's Foreign Economic Bank," and expressed expectations that "Although the Joint Cooperation Committee has been operating since 2008, by specifying the basis for operation and cooperation areas this time, it will quickly resolve pending issues between the two countries and expand opportunities for Korean companies to participate in Turkmenistan projects."

Cooperation with Turkmenistan will also be strengthened in construction, transportation, and infrastructure sectors. Minister of Land, Infrastructure and Transport Park Sang-woo explained at a local briefing, "An aviation agreement was reached last week," and added, "Currently, flights between the two countries operate twice a week without distinction between passenger and cargo flights, but going forward, passenger flights will increase to three times a week and cargo flights to twice a week, totaling five flights."

Minister Park predicted, "Even if Korea is not the final destination, Incheon Airport can be used as a convenient transit stopover, so Turkmenistan is making significant efforts in this regard," and "This will greatly contribute to expanding direct exchanges and third-party exchanges using transit stopovers."

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