South Korean construction group Hyundai Engineering has signed a contract worth around $3 billion with Ahdaf Investment Company to build the second phase of the Kangan Petro Refining Complex, a major petrochemical and refinery project in southern Bushehr province, Iran.

The project will produce 1 million t/y of ethylene, 500,000 t/y of monoethylene glycol as well as 350,000 t/y each of HDPE and LLDPE. Construction will take 48 months, Hyundai said. Natural gas feedstock will be sourced from the South Pars field in the Persian Gulf.

According to Shana, the Iranian oil ministry’s news service, finance for the engineering, procurement, construction and finance contract will be finalized within nine months by South Korean banks.

Ahdaf Investment Company, the majority stakeholder in the Kangan project, is a subsidiary of Iran’s Oil Pension Fund Investment Company.

The Mehr News Agency, quoting Ali Mohammad Bosaqzadeh, National Petrochemical Company’s coordination and supervision director, said at least seven major petrochemical complexes are planned to go on stream in the first half of the next fiscal year, which starts on Mar. 21. The country’s annual petrochemical output is close to 65 million t but plans are in place to boost capacity by 40 million t over the next five years. By 2026, installed petrochemical capacity is projected to reach 140 million t.

Bosaqzadeh said  Iran has signed memoranda of understanding with French oil and gas giant Total and Germany’s Linde, and agreements are expected to be finalized in the coming months. Several other companies, including BASF subsidiary Wintershall, German engineering contractor ThyssenKrupp Uhde, Air Liquide’s global E&C Solutions (formerly Lurgi) and Shell are either working on projects or discussing potential ventures in the country.