Korea’s HEC signs $3.2B petchem deal in Iran

Korea’s Hyundai Engineering (HEC) and Iran’s state-run Ahdaf Investment Co. signed a $3.2 billion deal for construction of Phase II of the Kangan Petro-Refinery project, Kallanish Energy learns.

The petrochemical deal is the first one signed by Korean in Iran since 2005. Financing of the engineering/procurement/construction deal will be provided over a nine-month period by Korean banks, according to the Shana news agency.

Asghar Arefi, managing director of Ahdaf, said the deal was signed after 18 months of negotiations and will be “one of the most lucrative projects in Iran.”

Phase II of the project includes four petrochemical plants, with construction estimated to last 48 months. The second phase is projected to produce 1 million metric tonnes per year of ethylene as well as 750,000 million tonnes per year of light and heavy polyethylene.

Ahdaf, a subsidiary of the Oil Pension Fund Investment Co., has already invested €120 million ($128.8 million) to cover 30% of the cost of the first phase.