SABIC has agreed a set of principles with Shenhua Ningxia Coal Industry Group (SNCG) and the government of the Ningxia Hui Autonomous Region of China to jointly develop a greenfield coal-to-chemicals complex. SNCG is an affiliate of Shenhua Group, one of the country’s biggest producers of coal, and operates a coal-to-chemicals complex in Ningdong, where it produces methanol, propylene and PP.

The agreement was signed during the visit of a high-level delegation from Saudi Arabia visiting China ahead of the G20 Hangzhou summit that took place on Sept. 2-4. It follows the signing of a project development agreement in May to build the complex in Ningxia, one of China’s largest coal producing regions. Ningxia’s government has committed to provide support and incentives to the project as well as a framework for co-ordination and co-operation between the three parties in connection with the approval process.

The complex will focus on highly-differentiated applications and segments through polymer derivatives. It will use SABIC’s advanced technologies and will also access the Saudi company’s Technology & Innovation Centers for product development, technical support and application development programs. Additionally, SABIC will leverage its global marketing and customer service capabilities.

Yousef Al-Benyan, SABIC’s vice chairman and CEO, said the group is looking to further its investment in China as well as its strategic engagement with key participants in the country’s petrochemicals industry. SABIC currently operates a petrochemical complex in Tianjing in a joint venture with state-owned Sinopec.