Oman Oil Company signed a $300 million (Dh1.1 billion) shareholders agreement on Sunday with LG International of Korea and the Iranian National Petrochemical Company.

The deal is for the construction of an ethylene dichloride (EDC) plant at Sohar port industrial zone.

Maqbool Bin Ali Sultan, Oman's Minister of Commerce and Industry and chairman of Oman Oil Company (OOC), signed the agreement for the Omani company. "OOC will own a 33.4 per cent stake in the venture while LG International (LGI) and NPC each will acquire a share of 33.3 per cent."

Mohammad Reza Nemat-zadeh, Undersecretary in the Iranian Petroleum Ministry and president of NPC, signed for the Iranian company and David Kang, LGI executive vice-president, for his company.

The Omani minister said 30 per cent of the project cost will be in the form of equity capital and 70 per cent will be financed from loans to be obtained from local and international banks.

He said financial closure will be concluded in the last quarter of 2005 and implementation will commence in the first quarter of 2006. Commercial operations will begin in the second quarter of 2008.

Maqbool said such a project "is a clear indication of additional investment projects being implemented by His Majesty's government, which encourages foreign investors to enter into joint ventures aimed at diversifying and developing the Omani economy."

Nematzadeh said the agreement was a step in the direction of National Petrochemical Company's declared policy of regional cooperation in the petrochemical sector.