Chinese contractor Huanqiu Contracting and Engineering Corporation signed here Thursday an engineering, procurement and construction contract worth nearly 510 million U.S. dollars with the Vietnam National Chemical Corporation on building a big urea plant in Vietnam's northern Ninh Binh province.

The Ninh Binh fine coal-based urea plant project will help Vietnam lessen reliance on urea imports and ensure the country's agricultural production, Chinese ambassador to Vietnam Hu Qianwen said at the contract signing ceremony, noting that the project will use most advanced and environment-friendly production technologies, and create over 1,000 jobs for local people.

The on-time realization of the contract will contribute to fostering economic and trade cooperation between China and Vietnam, he said.

The urea plant will have an annual production capacity of 560, 000 tons of urea and 320,000 tons of ammonia, key material for fertilizer production. Its construction is scheduled to start in early 2008 and finish in 2010.

At the signing ceremony, Vietnamese Deputy Minister of Industry and Trade Do Huu Hao said Vietnam is expanding existing fertilizer plants and building new ones, so that the country can produce 2.5- 3 million tons of urea in 2010, meeting the domestic demand.

Vietnam spent 134 million dollars importing 519,000 tons of urea, mainly from China, Indonesia, Russia and the Middle East in the first 10 months of this year, down 21 percent and 15.6 percent, respectively, according to the country's General Statistics Office.

Vietnam's total demand for fertilizers in 2007 is estimated at nearly 7.9 million tons, including 1.8 million tons of urea, and domestic supplies are likely to stand at 4.7 million tons, according to the country's Ministry of Industry and Trade.