Hyundai E&C cancels €458m petrochemicals deal with Iran due to sanctions

South Korean Hyundai Engineering & Construction has cancelled a KRW594bn (€485m) deal to build a petrochemical complex in the southern Iranian province of Bushehr, due to impending US sanctions.

In a regulatory filing on 29 Oct, the Seoul-based company said it terminated its contract with Ahdaf Development Co. on 28 Oct, due to what it described as “deterioration of external conditions such as economic sanctions”.

As a result of the sections sanctions, said the Korean firm, the contractor's ability to procure funds and execute the project had become “virtually impossible”.

The US is re-imposing sanctions against Iranian crude oil as of 4 Nov, following President Trump’s withdrawal from a historical nuclear pact with Tehran in May.

Iran and Hyundai E&C signed a contract last March to build Kangan 2 petrochemical complex and auxiliary facilities in the southern Bushehr province, to produce 350 kilotonnes per annum (ktpa) of heavy polyethylene and 350ktpa of light polyethylene.