Germany’s Linde has signed a Memorandum of Understanding (MoU) with Saudi International Petrochemical (Sipchem) to form a strategic partnership.

The companies intend to supply industrial gases to Saudi Arabia’s refining and chemical industries, according to Sipchem’s filing to the Saudi Stock Exchange. The agreement is valid until end March 2020.

The primary focus of the partnership, which is expected to go into operation in 2020, will be to connect by pipeline both parties’ hydrogen and synthesis gas (syngas) plants at Jubail Industrial City.

In addition, the partners aim to develop new production facilities to supply carbon monoxide, hydrogen, syngas and associated gases in the Kingdom’s industrial clusters.

“Sipchem is eager to expand its operations to fulfill the growing demand from national refiners and petrochemical plants in the kingdom,” said Sipchem CEO Saleh Bahamdan. “This partnership has the potential to blend stable returns with long-term supply commitments, offering us the opportunity to manage the typical cyclicality of the petrochemical industry.”

Linde’s executive vice president Eduardo Menezes added: “The combined onsite footprint and operational excellence of the two companies will create a compelling opportunity for us and our customers in Saudi Arabia.”