South Korea secured $6 billion worth in construction projects from Turkmenistan

South Korea and Turkmenistan are deepening their economic partnership through a series of new construction deals and strategic agreements that pave the way for expanded cooperation in energy, infrastructure, and trade. The recent agreements, signed during a bilateral summit between South Korean President Yoon Suk Yeol and Turkmen President Serdar Berdimuhamedow in Ashgabat, are expected to generate contracts worth approximately $6 billion for South Korean firms.

Among the significant outcomes of the summit was the signing of eight Memorandums of Understanding (MOUs), signaling an enhanced collaboration between the two nations. The agreements focus on large-scale energy and construction projects, as well as broader strategic initiatives. President Yoon emphasized the potential of these agreements, particularly in facilitating the creation of a supercontinental shipping route linking Asia and Europe, while also strengthening ties in the energy sector.

Energy and construction projects

Key among the deals was Hyundai Engineering’s agreement with the state-owned Turkmengas for the construction of a fourth-stage desulfurization facility at the Galkynysh Gas Field, one of the largest in the world. This project, alongside a second-stage agreement to resume operations at the Kiyanly Polymer Plant on the Caspian coast, highlights the scale and importance of South Korean participation in Turkmenistan’s industrial development. Additionally, Daewoo Engineering & Construction is well-positioned to secure contracts for urea and ammonia fertilizer plants, contributing to the overall economic value of the cooperation.

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These three major deals are set to bring substantial financial benefits to South Korean companies, with Yoon’s senior secretary for economic affairs estimating the total value of the contracts at $6 billion. The increased collaboration is seen as a boost to both nations’ economies and a step forward in strengthening bilateral ties.

Promoting trade and investment

In an effort to further support business exchanges, the two governments signed a bilateral framework agreement, known as the Trade and Investment Promotion Framework (TIPF). This mechanism is designed to facilitate not only trade and investment but also strategic cooperation in response to changes in the global trading order. Notably, the TIPF is expected to create a stable investment environment for South Korean firms, addressing previous challenges in market access due to Turkmenistan’s non-membership in the World Trade Organization (WTO).

The TIPF agreement opens opportunities in various sectors, including energy, green economy, and digital technology. Both countries are also looking to collaborate in the development of smart cities, transport infrastructure, and shipbuilding, with a focus on enhancing technological and industrial cooperation.

Expanding connectivity and regional cooperation

The summit also laid the foundation for increased connectivity between South Korea and Turkmenistan. The two leaders agreed to expand flight operations between the countries from the current twice-weekly schedule to five times per week, aimed at fostering greater business and cultural exchanges.

Additionally, the Turkmen President expressed support for South Korea’s K-Silk Road Initiative, a strategic regional framework that promotes comprehensive cooperation with Central Asian countries. This initiative focuses on areas such as natural resource procurement and human development cooperation, further integrating South Korea into the region’s economic landscape.