Hyundai Engineering has finalized a deal worth 3.8 trillion won ($3.2 billion) with Ahdaf Investment Company for the construction of the second phase of a refining complex in Iran, the Korean company said Monday.

The contract signed in Tehran is considered to be the largest in amount to date for such projects procured by South Korean companies in Iran.

“The project allowed us to spearhead into the Iranian construction market as a lead manager. We plan to do everything in our capacity to clinch additional projects in the future,” Hyundai’s spokesperson said. 

The engineering arm of Hyundai will be the lead manager of Kangan Petro Refining Complex construction project at Iran South Pars Gas Field in the Persian Gulf. The project is supervised by the project’s majority stakeholder Ahdaf Investment Company, an affiliate of the National Iranian Oil Co. According to Asghar Arefi, the managing director of Ahdaf, 30 percent progress was made during the first phase of the project.

The second phase focuses on establishing a petrochemical complex in Tonbak, a region 1,100 km south of Tehran, for the annual production of about 1 million tons of ethylene, 500,000 tons of monoethylene glycol and 350,000 tons of heavy and light polyethylene.

The memorandum of understanding for the deal had been signed during former President Park Geun-hye’s visit to Iran last May. The contract was sealed 10 months into the talk through effort of the South Korean government and Hyundai.

The Export-Import Bank of Korea and the Korea Trade Insurance Corporation have agreed to finance 85 percent of the total fund.

By Jung Min-kyung (mkjung@heraldcorp.com)