Saudi Basic Industries Corporation (Sabic), the world’s biggest petrochemicals exporter, is signing an agreement with state-owned oil giant Saudi Aramco to develop its first crude oil-to-chemicals complex in the kingdom.

Sabic has conduct its own preliminary study ahead of signing the agreement, which will allow it and Aramco to conduct a comprehensive joint feasibility study. If this is successful, it will form the basis for establishing a joint venture for the development of a fully integrated chemicals complex, according to a Sabic statement to the Saudi Stock Exchange (Tadawul), where its shares are traded.

The agreement “reflects the company’s intention to develop investment opportunities that better help it achieve its strategic goals”, Sabic said in the statement, adding that the joint feasibility study would not have a significant financial impact on the company and it will announce any significant developments in due course.

In May, Sabic, which has been looking to expand at home and abroad, signed an agreement with China’s Shenhua Ningxia Coal Industry Group, which could see the Saudi firm building a petrochemicals complex in China.

Sabic is conducting a study and “in light of the results of the study referred to, the parties will take the investment decision to develop the project”, the firm said in a statement to the Tadawul on 31 May.

The joint project will be a greenfield complex located in the Ningxia Hui region of China. Sabic’s Chinese counterpart for the scheme is a unit of Shenhua Group Corporation.

Sabic did not reveal financial details or a time frame for the project. The firm said the agreement was in line with its policy of geographical diversification.