Bloomberg- Talks between Brazil, Iran and India could result in the construction of an oil refinery and petrochemical plant in one of the South American nation’s poorest states, according to politicians, a diplomat and other people close to the talks.

The state of Maranhao, on Brazil’s northern Atlantic coast, is offering a 5,000-acre site for the project, according to a senior official in the state’s government, who requested not to be named because he doesn’t want to jeopardize the talks. The area already has a deep water port for tankers and its location would provide relatively easy access to the Pacific and Asia via the Panama Canal.

Despite extensive oil reserves, Brazil lacks refining capacity. The project would help Brazil address its dependence on refined fuel imports and could provide a boost to the local economy, Jose Reinaldo Tavares, a federal lawmaker, said in an interview. The project would require investment of at least $2.5 billion, according to the legislator, who recently traveled to Tehran and New Delhi as part of an official delegation from Maranhão.

Iranian oil officials have visited the proposed site twice already, a local Maranhao official said. Mohammad Ali Ghanezadeh, Iran’s ambassador to Brazil, said in an interview that his government is "very much interested" and "ready to put money and energy" into the project. He added that the main obstacle to the deal are U.S. banking sanctions.

Engineers India Ltd, a New Delhi-based design and engineering company, is participating in the discussions but its involvement will depend on financing conditions, according to people in India and Brazil familiar with the talks. EIL did not respond to calls and e-mails.