Kuwait Petroleum Corporation (KPC) has reached a preliminary agreement with France’s Total to jointly develop a refining and petrochemicals project in China.

KPC’s subsidiaries Kuwait Petroleum International (KPI) and Petrochemicals Industries Company (PIC) signed a memorandum of understanding (MOU) with the oil major on the Zhanjiang project in Guangdong province.

The partners will work with Sinopec to develop a 300,000 barrels a day (b/d) refinery with an integrated petrochemicals complex. The refining and petrochemicals processes will be developed to use crude produced by KPC in Kuwait as a feedstock.

The MOU provides the framework for KPI, PIC and Total to form a partnership, which will potentially hold interests in two joint ventures with state-backed Chinese oil and petrochemicals major Sinopec.

KPC is also planning to increase petrochemicals capacity domestically by building a new cracker through its PIC subsidiary. The olefins 3 cracker is expected to start up in 2017 with a capacity of 1.4 million tonnes a year of ethylene.