Saudi chemical manufacturer SABIC will build a $6.4bn petrochemical complex in the Chinese province of Fujian.

The announcement comes after SABIC signed a memorandum of understanding (MOU) with China’s Fujian Provincial Government on 11 September 2018 to develop a “world scale complex located in Fujiang”.

According to a company exchange filing published on Sunday, SABIC will finance the project through debt, as well as the company’s cash flows. The agreement gives SABIC a 51% ownership stake in the facility, with the remaining 49% being kept by Fuhua Gulei Petrochemical.

The planned complex will consist of ethylene glycols, polyethylene polypropylene, polycarbonate and other units, as well as a mixed feed steam cracker with an expected maximum ethylene capacity of up to 1.8 million tonnes.

Construction is scheduled to begin in the first half of 2024, with operations set to commence in the second half of 2026.

SABIC is owned by Saudi Aramco, the country’s oil giant and the second-largest company in the world by revenue. In October 2023, China’s neighbour, Vietnam, called on Saudi Aramco to help with the building of the country’s petrochemical and oil refinery projects.

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The Saudi chemical manufacturer has a market capitalisation of $62.55bn. When markets opened on Monday, SABIC’s share price rose from $20.74 to $21.09 before going down to $20.90 at the time of reporting.