Being the first such deal in the post-sanctions setting, the Korean side is signing the deal after a year of negotiations with Iran's National Petrochemical Company (NPC).
Based on the deal, engineering, procurement and construction plus financing of the project will be done by the Korean developer of the project.
The deal is being signed parallel with a landmark visit to Iran by a South Korean president since establishment of diplomatic ties between the two countries in 1962.
The Korean Exim bank will finance the 19-month project, according to the deal.
The project is being carried out for production of 175,000 tons of pentane, a strategic item for production of petrochemical products.