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A group of three Saudi companies are forming a joint stock petrochemical company with a Chinese partner.

The three Saudi companies are Midroc, Sara Development and House of Invention (HOI). The Saudis announced that part of the SR6.6bn (US$1.76bn) company’s capital will be offered in an initial public offering (IPO) and the rest will be distributed among the three companies and their Chinese partner.

The new company is set to establish a SR22bn (US$6bn) petrochemical complex in the Jubail Industrial City, located in Eastern Province, and is expected to create 2,500 new jobs for Saudi nationals.

The production capacity of the new complex is expected to be 2mn tonnes of basic and secondary petrochemical products annually.

HOI Company CEO Abdullah Ahmed Bugshan claims that the new complex’s initial phase of production would start in 2007 and the production of basic petrochemicals will commence no later than 2010.

The group is negotiating with Saudi Aramco and Saudi Basic Industries Corporation (Sabic) to supply the complex’s medium and small size production lines with primary materials.

Midroc-Saudi Arabia is owned by the Saudi-Ethiopian business tycoon, Mohammed Hussein Al-Amoudi.

Amoudi, the largest investor in Ethiopia, is a major partner in the Swedish consortium Midroc, especially in its ABV Rock Group.