Saudi Hydrogen Peroxide Co., a new company created by Brussels-based chemicals company Solvay SA (SOLB.BT) and Sadara Chemical, said Monday they have started constructing one of the world's largest hydrogen peroxide plants in Jubail on the Gulf coast.

The plant, the first of its kind in the kingdom and the third joint venture for Solvay, will have a capacity of more than 300,000 metric tons per year when it starts production in 2015.

Sadara, the $19.3 billion petrochemical joint venture between state oil giant Saudi Aramco and Dow Chemical Co. (DOW), will use output from the plant as a raw material for the hydrogen peroxide-to-propylene oxide manufacturing plant in its mega complex in Jubail Industrial City II.

The unit will also support Sadara's propylene oxide derivative units that produce polyols and propylene glycol. The Sadara complex, one of the world's largest chemicals plants, is expected to produce more than 3 million tons of petrochemicals a year once it is completed in 2016.

Saudi Arabia is pouring billions of dollars into developing its petrochemical industry to add value to its vast hydrocarbon resources and create jobs for its young and growing population.

The Sadara project represents Aramco's second major investment in a large-scale petrochemical complex in the kingdom. It is already involved in a joint venture with Sumitomo Chemical Co. (4005.TO) in Rabigh on the Red Sea.