(Yicai Global) Jan. 10 -- German chemical giant BASF will build a USD10 billion highly integrated chemical plant in China's southern city of Zhanjiang in Guangdong province.

The Guangdong government and BASF Chairman Martin Brudermüller have signed a framework agreement, the Ludwigshafen-based firm said in a statement. The deal builds on a memorandum of understanding signed last July.

The facility will use waste and byproducts as raw materials, boosting resource and energy efficiency while reducing environmental impacts.

The nine-square-kilometer project includes a wholly-owned steam cracker with a planned capacity of one million metric tons of ethylene annually and several plants for consumer-oriented products and solutions.

BASF operates six similar highly-integrated plants at present including two in Europe and North America. The company also runs one facility in Nanjing China through a joint venture with Sinopec and one in Kuantan, Malaysia, through a joint project with Petronas.