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Thu 18 Dec 2008 02:30 PM

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Kuwait challenges Dow joint venture proposal

Lawmakers claim that petrochemical project no longer viable in global financial crisis.

Kuwait said it will refer plans for a joint venture with Dow Chemical to the country's top legal authority after parliamentary opposition to the multi-billion dollar deal, state news agency KUNA said.

State-run Petrochemical Industries Co (PIC) said on Wednesday it was going ahead with the venture, triggering anger among some lawmakers who said it was no longer viable in light of the global financial crisis and slumping petrochemicals sales.

Deputy Prime Minister Faisal al-Hajji told KUNA late on Wednesday that the government had referred the deal to the state audit bureau, which monitors spending and revenues, last Sunday.

"The issue will be referred on Thursday to the government's Fatwa and Legislation Department to take all necessary measures," KUNA cited Hajji as saying, without elaborating.

PIC, which is owned by Kuwait Petroleum Corp (KPC), signed a deal earlier this month with Dow, the largest chemicals maker in the United States, to launch K-Dow Petrochemicals. PIC is to pay Dow $7.5 billion for its stake in the venture.

The original value of the deal was cut by more than 8 percent to about $17.4 billion in light of the global slowdown.

A new cabinet is expected to be appointed in Kuwait in the new year after the old one resigned last month over a standoff with deputies. (Reuters)

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