Petrokemya, a subsidiary of Saudi Basic Industries Corporation (Sabic) has signed an initial deal with Spanish oil engineering company Tecnicas Reunidas to build a petrochemical plant in the Saudi industrial city of Jubail.

The long-awaited project for the acrylonitrile butadiene styrene (ABS) plant, is estimated to cost $561 million and is expected to start initial operations in the fourth quarter of 2014, Sabic, the world's biggest petrochemicals group by market value, said in a statement on the Saudi bourse on Saturday.

It did not provide the value of the contract with Tecnicas Reunidas, and said it would finance the project with its own resources.

The project would have production capacity of 140,000 tonnes per year of the ABS product, which is used by the automotive industry among others, Sabic said.

Arabian Petrochemical Company, known as Petrokemya, is fully owned by Sabic.

The Saudi petrochemical giant had said last year it would launch a joint venture firm, Saudi Japanese Acrylonitrile Company (Shrouq) with Japan's Asahi Kasei Chemicals and Mitsubishi to build a plant to produce acrylonitrile and sodium cyanide at one of its affiliates' sites in Jubail, with a final investment decision due in 2012.-Reuters