Mumbai: Saudi Basic Industries Corporation (SABIC) has signed a joint venture agreement with China Petroleum and Chemical Corporation (Sinopec) for building a one million tonnes per annum capacity ethylene derivatives project.

SABIC chairman, Prince Saud bin Abdullah bin Thenayan Al-Saud, and Sinopec Corp. Chairman, Su Shulin signed the agreement at a function in Beijing yesterday.

The two companies will have equal stake in the project, to be set up in the northern Chinese port city of Tianjin.

Construction of the complex, involving investment of $1.7 billion, the first China joint venture of SABIC, is slated for completion in September 2009.

When completed, the complex would produce 600,000 tonnes of polyethylene and 400,000 tonnes of ethylene glycol, SABIC said.

The complex will receive all its feedstock from an ethylene cracker owned by Tianjin Petrochemical Company of Sinopec. 

 "The new joint venture with Sinopec Corp. will further strengthen the links between our two companies. This will be SABIC's first joint venture in China and we hope this will lead to more joint ventures and a strong relationship with Sinopec in the important China market," said Prince Saud.

"China is an important market for SABIC's global strategy. This agreement is a key milestone towards realising SABIC's goal of establishing a manufacturing centre in Asia. This facility in Tianjin will serve customers in the world's fastest growing market, and is an important component in SABIC's corporate strategy of being among the world's top petrochemical companies by 2020," said Mohamed Al-Mady, SABIC vice chairman and CEO.

SABIC already has ties with Sinopec whose engineers are currently helping to construct a world-scale polyolefins complex for SABIC affiliate Yanbu National Petrochemicals Company in Yanbu, Saudi Arabia.