Saudi Aramco and the Dow Chemical Company are forming a joint venture for a US$20bn chemicals complex in Jubail Industrial City on Saudi Arabia’s east coast.

The JV, named Sadara Chemical Company, will raise the funds through the debt markets following an initial public offering.

In particular, Saudi Aramco and Dow have announced that it will tap the project finance market and enlist export credit agencies to provide cover.

Construction will begin immediately and the first production units will come on line in H2 of 2015. The companies expect all units to be operational during 2016.

On completion, Sadara will consist of 26 manufacturing units and be one of the world’s biggest integrated chemical facilities and the largest ever built in a single phase.

The complex will produce around 3 million metric tonnes of chemical products and performance plastics for energy, transportation, infrastructure and consumer products.

The move will help Saudi Arabia diversify its economy away from oil.

“Many of Sadara’s products will be produced for the very first time in Saudi Arabia,” says Khalid Al-Falih, president and chief executive officer of Saudi Aramco.

“It will enable significant development in the country’s conversion industry, thereby supporting Saudi Arabia’s ambition to be a magnet for downstream manufacturing investments that add significant value to the kingdom’s hydrocarbon resources.”

More to follow.