Press TV- South Korea’s SK Engineering and Construction Co (SKEC) signed a heads of agreement on Saturday for a 1.6 billion euro upgrade of the Tabriz refinery in northwest Iran, the Tasnim news agency reported.

South Korean National Assembly Speaker Chung Sye-kyun, who is in Tehran to attend President Hassan Rouhani’s swearing-in, oversaw the signing between SKEC, Tabriz Oil Refining Company and National Iranian Oil Engineering and Construction Company (NIOEC).

“The purpose of the signing of the agreement, which is about to be signed into a contract in the near future, is to convert the furnace oil produced at the Tabriz refinery to products of higher value according to Euro 5 standard,” the news agency said.

Export-Import Bank of Korea will finance the project which includes upgrades to desulfurization equipment as well as gasoline, diesel and other facilities, it added.

The project will be carried out over a period of 48 months, bringing down the furnace oil capacity at the refinery to 2.0% from 20% now.

The Tabriz oil processing plant, built in 1976, is among the Iranian refineries in dire need of upgrade and modernization. In February, the country signed a $3 billion contract with China to upgrade the Abadan refinery in southwest Iran.

Tabriz operates with a capacity of 110,000 barrels per day, turning crude oil to liquefied petroleum gas (LPG), gasoline and diesel.