A joint feasibility study to build the first ever oil-to-chemicals (OTC) complex in the kingdom by state oil giant Saudi Aramco and Saudi Basic Industries Corporation (Sabic) is expected to be concluded in early 2017, according to the CEOs of the two companies.

The firms signed a preliminary agreement on 28 June to conduct the study for the potential project, which is in line with Saudi Arabia’s efforts to cut its dependence on revenues through the sale of hydrocarbons.

The overall cost of the scheme will be indicated by the study, although Sabic has previously said its own OTC complex at Yanbu could cost as much as $30bn.

The study will consider aspects including the capacity of the project, its overall size and job creation. Initial plans for the joint venture focus on the Red Sea city, but other areas are also being explored, Sabic’s acting CEO Yousef al-Benyan told reporters on the sidelines of the signing ceremony.

Increased employment is at the heart of Saudi Arabia’s economic transformation plan, announced in June. The project could create as many as 100,000 jobs directly and indirectly, news agency Reuters cited industry source as saying.

Other benefits of an integrated OTC would be lower costs than those associated with traditional refining methods while reducing the heavy burden of using gas to create petrochemicals at a time when the kingdom is suffering from gas supply constraints.

Al-Benyan told UK news agency Reuters that combining the companies’ expertise for the first time would create many benefits and accelerate the development of OTC technologies, with the proposed project targeted for completion in 2021.

“Unlike in the past, where [Sabic and Aramco] have worked in isolation from each other, this now opens a new chapter for cooperation and coordination and for capturing additional markets in line with Vision 2030,” said Sadad al-Husseini, a former senior executive at Aramco.

The OTC project will not use oil products such as naphtha. It is likely to use the lightest grades of crude, Aramco CEO Amin Nasser told reporters, adding that there would be no impact on oil supplies.

Chemicals produced by the complex are currently earmarked for export to Europe and Asia, Al-Benyan said.