Saudi Arabia’s state oil giant Aramco is partnering with French energy company Total to build a giant petrochemical complex in the city of Jubail.
The announcement came as Saudi Crown Prince Mohammed bin Salman visits Emmanuel Macron, French President in Paris.
The joint venture will “exploit operational synergies” and see $9bn (£7.2bn) invested in the project in the Persian Gulf, the companies said after signing a memorandum of understanding.
The refinery will create 8,000 local direct and indirect jobs the statement said.
Aramco, the most valuable energy company in the world, will hold the majority stake of 62.5 per cent to Total’s 37.5 per cent.
Engineering and design work will begin late this year and when complete the plant will produce more than 2.7 million metric tons of high-value chemicals, a press release put out by Total said.
“This project illustrates our strategy of maximizing the integration of our large refining and petrochemical platforms and of expanding our petrochemical operations from a low-cost feedstock, to take advantage of the fast growing Asian polymer market,” said Patrick Pouyanne, the chairman and chief executive of Total.
“Furthermore, this project will enable us to strengthen our ties with Saudi Aramco, with whom we successfully operate our biggest and most efficient refinery in the world.”
Jubail, on the eastern coast of Audi Arabia, has been inhabited by humans for at least 7,000 years and until 1975 remained a small fishing village. In 1933 it gained some fame for becoming the site at which geologists landed to begin searching for oil in Saudi Arabia.
In 1975 the Saudi government designated the town as the site for a huge new industrial city. The huge civil infrastructure project was boosted by an £11bn investment for expansion in 2014.
Crown Prince Bin Salman, who arrived in France over the weekend for an official visit lasting several days.
The two leaders are expected to discuss a future “strategic partnership” with further joint ventures thought to be announced during Mr Macron’s trip to Saudi Arabia at the end of the year.