RIYADH, (Reuters) – Saudi Basic Industries Corp 2010.SE (SABIC) is considering a deal with state-oil company Saudi Aramco to upgrade a Red Sea Coast refinery and a build a petrochemicals complex there, a magazine reported.

A deal would give SABIC, the world’s largest chemical maker by market value, access to Aramco feedstock and allow the state oil firm to press on with plans to develop its Yanbu project without a foreign partner, the Middle East Economic Digest said.

Any tie-up between the two companies would have the blessing of the Saudi government, the London-based weekly said in its latest edition, citing unnamed industry sources.

The Yanbu venture is one of three refinery and petrochemical plants belonging to Aramco, the world’s largest oil company by production. The other two, Rabigh and Ras Tanura, are joint ventures with Japan’s Sumitomo Chemical Co Ltd and the Dow Chemical Co of the United States.

Aramco announced plans for Yanbu in 2005, including upgrading the 235,000-barrel-a-day refinery and adding a steam cracker and aromatics complex, the magazine said.

“It will almost certainly produce a different range of products to the Rabigh and Ras Tanura complexes to avoid competing with them,” it said.

State-controlled SABIC, which makes chemicals, fertiliser and steel, in October posted its fifth consecutive record profit in the third quarter on higher prices for its products and more production.