Saudi Basic Industries Corporation (Sabic), the world’s largest petrochemical firm by market value, and China’s Sinopec have agreed to invest more than $1 billion in a petrochemical plant.

Under the preliminary deal, which needs Beijing’s final approval, the companies will build a 1-million-tonne per year naphtha cracker to produce ethylene, a key building block for petrochemicals, in the northern Chinese city of Tianjin.
If approved, the deal will mark a breakthrough for international companies seeking a foothold in China’s fast growing petrochemical market, as it comes just when Beijing seemed to be shifting to self-reliance in building the booming sector.
Sabic will also be a partner in two production lines of polyethylene, a raw material for plastics, and one mono ethylene glycol facility, an intermediate for chemical fibre.
The facilities form a key part of a $3.1billion investment planned by the Chinese state giant, which also includes an expanded refinery and other downstream petrochemical units, they said.
Meanwhile, Sabic has officially opened two new China offices in Beijing and Shenzhen. The new branches strengthen the Sabic network which already includes offices in Shanghai and Hong Kong.
Sabic chairman, Prince Saud bin Abdullah  bin Thunayan Al-Saud, said the new offices reflected his company’s commitment to invest in long-term growth in China.