July 2 (Bloomberg) -- Iranian President Mahmoud Ahmadinejad and his Venezuelan counterpart, Hugo Chavez, will inaugurate the construction of a petrochemical plant in southern Iran, a joint project intended to strengthen ties between two ideological allies.

Chavez, who's on a three-day trip to the Islamic republic, will take part in a ceremony today for the methanol plant, which will be built in the Iranian town of Assaluyeh, according to Shana, the official news agency of Iran's Oil Ministry.

The plant will have an annual production capacity of 1 million tons of methanol, Shana said. Iran's National Petrochemical Co. will hold 51 percent of the company, Shana said, and the Venezuelan Petrochemical Co. will own the rest.

A similar methanol plant will be built in Venezuela as part of the two agreement, the agency said. The Venezuela plant will facilitate Iran's access to Latin American and Brazilian markets; the Iranian project will give Venezuelan better access to Middle Eastern and Asian markets such as Pakistan and India, Shana said.

Ahmadinejad and Chavez, whose nations are both part of the Organization of Petroleum Exporting Countries, favor populist policies and use their countries' oil wealth to push social spending. Last year, Iran and Venezuela were the world's fourth- and sixth-largest exporters of oil, respectively.

The two leaders also oppose the United States. In a meeting yesterday, Chavez claimed that Venezuela's collaboration with Iran will help defeat ``imperialism,'' while Ahmadinejad routinely calls for resistance in the face of U.S. ``bullying.''

Chavez is a vocal supporter of Iran's nuclear program, which is under United Nations sanctions because of fear among the U.S. and its allies that it may be used to build atomic weapons.

Iran and Venezuela are to sign some 20 agreements in various fields during Chavez's visit to Iran, according to the official news agency IRNA. Chavez's visit to the Islamic republic is the third since Ahmadinejad won the presidency in 2005, Iran's local media reported.

To contact the reporter on this story: Ladane Nasseri in Tehran at lnasseri@bloomberg.net.

Last Updated: July 2, 2007 06:28 EDT