South Korean construction firm GS Engineering and Construction is moving to jump back into the Iranian construction market after eight years.
GS E&C is currently in talks with Entekhab Investment Development Group to lead the construction design of a petrochemicals project in the Middle Eastern country. The design contract is reportedly expected to be worth some $6 million.
“GS E&C in October signed a head of agreement with the Iranian firm with regards to the design of the project,” GS E&C officials said. The total size of the petrochemicals project will be measured after the completion of the design process, the company added.
A head of agreement is a nonbinding document that outlines the main issues related to the possible contract. It is often regarded as the first step for a legally binding contract. In Iran, partners need the document to win the government’s approval to raise investment.
If GS E&C secures the design contract, it will become the company’s first deal to be signed with a firm in Iran in eight years.
The previous deal GS E&C secured in Iran was the South Pars natural gas field development phase 9 and 10 project, which was completed in 2008.
GS E&C secured an additional South Pars gas field development project the following year, but the deal was canceled due to economic sanctions against Iran over its nuclear program in 2010.
GS E&C has completed five construction projects, totaling around 2.4 billion won ($2.2 million), since the company established its Tehran office in 2001.
By Shim Woo-hyun (email@example.com)