Doha: Qatar Holding Intermediate Industries Company (Waseeta) and South Korea's Honam Petrochemical Corporation signed a memorandum of understanding on Thursday to set up a $2.5 billion (Dh9.17 billion) petrochemical joint venture.

The joint venture agreement between the two parties is to be signed over the coming months.

Waseeta will acquire a 70 per cent stake in the joint venture, while Honam Corporation will retain the remaining 30 per cent.

The venture will produce key raw materials for plastic industries.

The plants will be set up in the petrochemical complex at Messaieed Industrial City in the south of the country.

The total annual capacity of the project, which is expected to come on stream by 2009, will be 1.7 million tonnes.

It will consist of three major plants each to produce propylene and poly-propylene, styrene and polystyrene, aromatics and by-products.

The propylene and poly-propylene plant will have an annual capacity of 900,000 tonnes, the styr-ene and polystyrene plant will have a 600,000 tonnes capacity, while the aromatics plant will have 150,000 tonnes capacity. By-products will have a total capacity of 50,000 tonnes.

Addressing reporters on the occasion of the signing during the weekened, Abdullah Bin Hamad Al Attiyah, Second Deputy Premier and Minister of Energy and Industry, said that these new products would constitute the basis for new intermediate industries that would eventually open the door for the creation and evolution of medium and small industries.

The minister said the petrochemical complex will enhance synergy with other affiliated companies of Qatar Petroleum and other facilities in the industrial area.