The contract awarded to South Korea’s Hyundai Engineering & Construction and the local Ahdaf Investment Company to develop phase two of the Kangan Petro-Refinery Project has been terminated.

Hyundai said in a filing to the Korea Stock Exchange that the $522m contract was terminated on 28 October due to economic sanctions on Iran.

The contract was awarded in March 2017. At the time, the deal was the biggest in the petrochemicals sector since nuclear-related sanctions on Tehran were lifted in January 2016.

Phase two of the project involves developing a petrochemicals complex in Tonbak, in the southern Bushehr Province.

The complex is set to have an annual production of a million tonnes of ethylene, 500,000 tonnes of monoethylene glycol, and 350,000 tonnes of heavy and light polyethylene.

The contract is the latest major construction deal with a South Korean contractor to be terminated in Iran. In June, Daelim Industrial said its contract to upgrade Iran’s Isfahan refinery had been terminated.

Like Hyundai’s Kangan project, Daelim said the contract with Esfahan Oil Refining Company (EORC) was cancelled following Washington’s decision to reintroduce economic sanctions on Iran.