China Petrochemical Corp, or Sinopec, together with KazMunayGas, a state-owned oil and gas company in Kazakhstan, will develop the biggest polyethylene project in Kazakhstan, the Chinese company said on Thursday.

Polyethylene is the most commonly produced plastic. A polymer, polyethylene is primarily used for packaging.

Sinopec signed an agreement with KazMunayGas in Xi'an, Shaanxi province, on Thursday for the joint implementation of the project in the Atyrau region of Kazakhstan, during the state visit to China of Kazakh President Kassym-Jomart Tokayev.

With a capacity of 1.25 million metric tons per year, the plant will be built on the territory of the special economic zone in Karabatan, close to the Tengiz field of the Atyrau region, Sinopec said.

To confirm Sinopec's future involvement in the project, the two sides will sign a share purchase agreement and other legally binding documents. The final investment decision, called the FID, of the project participants is expected in 2024, it said.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, said Chinese companies have various advantages in the petrochemical industry, ranging from technological capabilities to domestic market knowledge.

China has been investing in research and development to enhance its technological capabilities in the petrochemical industry. It boasts a strong presence in both the oil and gas exploration and production sectors, as well as in the refining and production sectors of the petrochemical industry, Lin said.

This has created synergies and cost advantages throughout the value chain. In addition, China's large and rapidly growing domestic market for petrochemical products supported its growth, he said.

Magzum Mirzagaliyev, chairman of KazMunayGas, said the wealth of Sinopec's experience in the design, construction and operation of technologically complex petrochemical facilities will have a positive effect on the planned polyethylene project.

The project will increase the investment attractiveness of the petrochemical industry of Kazakhstan, he said.

Sinopec said it would take advantage of its technology and expertise in the field of petrochemical facility construction, while its participation in the Kazakhstan project will also facilitate the marketing of the project's products in China.

Sinopec said the latest agreement further boosts cooperation between itself and KazMunayGas. The company will further take advantage of its capabilities in engineering, marketing, sales and production operations to further promote complementarity and win-win development of both sides.