Italy's Tecnimont has been hired to complete the engineering studies for the ethylene and polyethylene plants that will be constructed in southern Bolivia, state-owned oil company YPFB said.

The contract was signed in the eastern city of Santa Cruz on Friday by YPFB chief Carlos Villegas and Tecnimont general manager for Latin America Angelo Coppacchioli, the Bolivian oil company said in a statement.

Bolivia is paying $3.8 million for the study, which will submitted to YPFB in the first half of 2013.

The study will cover topographical, geotechnical, hydrological, technological, market, raw materials and other aspects of the project.

The study "will develop the most important technical and economic aspects of the project, allowing YPFB to make strategic decisions to move ahead with the subsequent stages of the project," the company said.

The petrochemical complex will be built in Gran Chaco, a province in the southern region of Tarija, and is expected to produce 600,000 metric tons of polyethylene annually, consuming approximately 756,000 tons of ethane annually. EFE