Saudi Basic Industries Corp. (SABIC) has announced that it has formed a framework agreement with China Petroleum and Chemical Corp. (Sinopec) for the construction of an ethylene derivatives plant in Tianjin, China's northern port city, with a joint investment worth $1.7bn.

The plant will become SABIC's first joint venture in China and both companies would hold an equal stake of 50% in the project, according to SABIC. Construction of the plant is expected to be completed in September 2009, with an annual production capacity of 1 million tonnes.

It will produce 600,000 tonnes of polyethylene and 400,000 tonnes of ethylene glycol each year after starting operation, according to SABIC.

SABIC is one of the largest and most reliably profitable public company’s in the Middle East and is also among the world's leading manufacturers of chemicals, fertilizers, plastics and metals.