Saudi Aramco and US Dow Chemical signed an agreement on Saturday to build a $20 billion petrochemical joint venture in Jubail.

The joint venture, Sadara Chemical Co, will annually produce more than 3 million metric tons of chemical products and plastics used in packaging, furniture, electronics and scores of other consumer goods.

The first production units are expected to come online in the second half of 2015, with the project fully operational in 2016.

“Most of these products are sold out or running at high rates with not much capacity coming at all,” Andrew Liveris, Dow Chemical’s CEO said.

“So actually they will be in short supply by the time we start up.”

Dow will try and seed its products from its own plants, Liveris said, referring to products such as urethanes, amines, glycol ethers and elastomers.

Sadara — an Arabic word meaning “in the lead” — is set to have annual sales of $10 billion within a decade of opening and create 14,000 jobs.

The project is important for Saudi Aramco as it plans to balance its energy portfolio and develop an industry which has been reliant on the imports of raw materials to make end-products.

The complex has been downsized from 35 to 26 units with less output capacity but Sadara still will have a massive presence on the global chemicals market .

Most of Sadara’s products have never been produced in the kingdom or in the Middle East, Khalid Al-Falih, Saudi Aramco’s CEO said.

“They are specialized products...It will enable products that have never been feasible in Saudi Arabia without the import of raw materials from far away places,” Al-Falih said.

The venture will give Dow access to cheap Saudi gas feedstocks and proximity to customers in Asia, Africa and Europe.

About 45 percent of the venture’s products will be sold in Asia, a major growth engine in global chemicals industry. The rest will be sold primarily in the Middle East and Europe.

Less than a third of Sadara’s feedstock will come from ethane, and the rest from liquid fuels.

“We have the capability to do half (gas), half liquid fuels if we find extra gas available from the (gas) system,” Liveris said.

The 20-year or more long term feedstock agreement with Aramco will include liquid fuels such as naphtha, gas oil, condensate and liquefied petroleum gas (LPG).

“We have written in the agreements that we can access the refinery streams if the cost structure of the naphtha is too expensive. So we have optimized the (feedstock) mix based on the products we will produce,” Liveris said.