Kazakh Film, Kazakhstan’s state company, has boarded Chuck Russell’s 3D adaptation of “1001 Arabian Nights,” starring Liam Hemsworth, which will shoot in the oil-and-gas-rich central Asian state next year.

Russell, who directed “The Mask” and “The Scorpion King,” has been scouting locations for the $70 million pic for the past year and will start shooting in June. Sets include a full-scale medieval period city 120 miles from Almaty, where Kazakh Film is based, that was built a few years ago for Russian director Sergey Bodrov’s “Nomad.”

Other locations are understood to include the sandy hills and gullies at Altyn Emel.

Kazakh Film is understood to be putting up some $10 million for the movie.

FilmDistrict acquired U.S. rights to the film at Cannes. Inferno is handling worldwide sales.

Russell said that working with Kazakh Film is like working in Hollywood in the 1950s and 60s.

“More than a decade ago I made ‘The Mask,’ ” Russell told reporters in Almaty after inking a co-operation deal with Kazakh Film.

“Now I want to make a film that is understood the world over. For a director, nothing is more pleasant than to discover new talent. Kazakh Film is like Hollywood studios were in the 1950s and 1960s, when they were discovering new faces and supporting young, novice directors.

“These days Hollywood prefers to work with familiar names and big stars.”

Ermek Amanshaev, head of Kazakh Film, is hoping that the recently modernized, state-of-the-art studios, fabulous locations and healthy finances will lure more major Hollywood productions to Kazakhstan.

“We are currently determining what part local Kazakh actors will play in the production,” Amanshaev said. “Those cast will receive training in the U.S.”

Russell, who was in Almaty in September as a guest of the Eurasia Film Festival, said he was keen to use local talent in the movie.

“When I was at the Eurasia festival, as I watched local films, I kept thinking, ‘Who is this and this?’

“My grandmother read ‘1001 Nights’ to me when I was a boy, it is the third most popular book in the world after the Bible and the Koran. I love travel and adventure. I’d like to create something special.”

Kazakhstan President Nursultan Nazarbayev has made supporting the film industry a priority.

His backing over the past two years has sparked a major investment program at Kazakh Film, and has helped spawn a resurgence in the domestic film industry that is now translating into interest in participation in international co-productions.

Last year 30 features were produced in Kazakhstan — 23 of them with state support — a three fold increase since 2007. Box office was $50 million, of which the domestic share was $7 million.