MIDLAND, MI/DHAHRAN, Saudi Arabia -- The Dow Chemical Co. and the Saudi Arabian Oil Co. (Saudi Aramco) announced that the Boards of Directors of both companies have approved the formation of a joint venture (JV) to build and operate a world-scale, fully integrated chemicals complex in Jubail Industrial City, Kingdom of Saudi Arabia.

The authorization for the new joint venture, named Sadara Chemical Co., comes after an extensive project feasibility study and front-end engineering and design effort that began in 2007.

Comprised of 26 manufacturing units building on Saudi Aramco’s project management and execution expertise, and utilizing many of Dow’s industry leading technologies, the complex will be one of the world’s largest integrated chemical facilities, and the largest ever built in one single phase. The complex will possess flexible cracking capabilities and will produce over three million metric tons of high value-added chemical products and performance plastics, capitalizing on rapidly growing markets in energy, transportation, infrastructure and consumer products.

Construction will begin immediately, and the first production units will come on line in the second half of 2015, with all units expected to be up and running in 2016. Once operational, Sadara is expected to deliver annual revenues of approximately $10 billion within a few years of operation and generate thousands of direct and indirect employment opportunities through the complex and related investments in downstream value parks.

Total investment for the project, including third-party investments, will be approximately $20 billion. Sadara will become an equal joint venture between Saudi Aramco and Dow after an initial public offering. In addition to equity from the partners, Export Credit Agencies and financial institutions will provide project financing to Sadara.

The complex will include a world-scale cracker that will be able to crack a wide range of feedstocks and be supplied by Saudi Aramco’s extensive integrated hydrocarbon infrastructure. Utilizing Dow’s state-of-the-art product technologies and Saudi Aramco’s project management and execution capabilities, the manufacturing units will produce a wide range of performance products such as polyurethanes (isocyanates, polyether polyols), propylene oxide, propylene glycol, elastomers, linear low-density polyethylene, low-density polyethylene, glycol ethers and amines.

Sadara will have responsibility for product marketing within a local zone of eight countries. Dow will market and sell on behalf of Sadara to all countries outside of the Middle East zone.

Jubail Industrial City is the largest industrial complex of its kind in the world. It is located in the Eastern Province of the Kingdom of Saudi Arabia, approximately 100 kilometers northwest of Dammam.