Shell has signed a deal with Iraq, possibly worth $11 billion, to build a petrochemicals complex in the southern oil hub of Basra, the news agency Reuters has reported.

The complex tentatively planned to start up within five to six years would make Iraq the largest petrochemical producer in the Middle East. Reuters quotes industry minister Nasser al-Esawi as saying the complex will be one of the largest foreign investments in Iraq and the most important in the petrochemical sector in the Middle East.

According to Esawim, the new plant will have capacity to produce 1.8 million t/y of petrochemical products.

A Shell spokesman told the news agency the project remains at a very early stage, while declining to say when construction work would begin. "There is no timeline, no further details beyond the fact that the heads of agreement has been signed," the oil and petrochemicals giant added.

Iraq's cabinet is said to have authorized the project in mid-January.

"Shell has been working with the Iraqi ministries of industry and minerals and jointly with the ministries of oil and transport to develop a joint investment model for a world-scale petrochemical cracker and derivative complex in the south of Iraq," a spokesperson told Reuters.

Shell is one of the biggest oil companies with operations in south Iraq, where it operates the Majnoon oilfield and leads the Basra Gas Co. joint venture.

Investments in the Middle East often take years to materialize, and some are cancelled without ever getting off the ground. Shell and Qatar Petroleum recently called off plans to build a $6.5-billion petrochemical plant in the emirate, saying the Al-Karaana project was no longer commercially feasible.