Petrochemical Industries Company (PIC), a unit of state-owned Kuwait Petroleum Corporation, and the US' Dow Chemical Company plan to build a new ethylene and derivatives complex in Shuaiba.
Work on the Olefins II project should begin soon with start-up set for early 2007.
PIC chairman and managing director Saad Al Shuwaib said the project would build on the successful business relationship between PIC and Dow subsidiary Union Carbide Corporation in Kuwait's Equate Petrochemical Company.
"Olefins II would be similar to the existing plants at Equate with an 850,000 tonnes per annum ethane cracker and a new world-scale 600,000 tonnes per annum ethylene oxide/ethylene glycol plant using Meteor ethylene oxide technology," Al Shuwaib said in a statement.
"Each party brings unique contributions to this relationship whether feedstock and infrastructure or technical and process skills, and we are pleased to be a part of this expanded effort."
The project will create jobs for qualified Kuwaitis and open opportunities for local contractors during the execution of the project and also during operation.
The existing capacity for Unipol polyethylene would be expanded to utilise the additional ethylene.
In addition to Olefins II, PIC and Dow expect to build an ethylbenzene/styrene unit of 300,000 tonnes per annum supplied with ethylene from Olefins II and benzene from the PIC Aromatics Project, to be built simultaneously on the site adjacent to Equate.
Theo Walthie, Dow business group president for hydrocarbons and energy and ethylene oxide-ethylene glycol, said Dow was looking forward to building on the partnership with PIC.
"The environmental and safety performance of this company is outstanding. Equate uses a very successful business model and is a very well-run company. Dow brings olefins, ethylene oxide-ethylene glycol and styrene operating experience and the very best technology available to continue and expand our synergistic relationship with PIC."
The two firms say these new projects could provide a basis for further cooperation both in and outside of Kuwait.
Equate's senior vice president Henry Roth said: "Equate is currently responsible for nearly 60 per cent of all non-oil exports from Kuwait. With the coming expansion of the facility, Equate's impact on the economy will be even greater."
Equate registered $107 million in net profits for 2002.
PIC and Dow Chemical (through its subsidiary Union Carbide Corporation) have each a 45 per cent share in Equate with Boubyan Petrochemical holding the remainder.
