Saudi Arabia's Aramco and French energy company Total signed a deal on Sunday to build an oil refinery in Saudi Arabia at an estimated cost of $6 billion.

The state-run oil company Aramco and France's biggest oil company signed a comprehensive Memorandum of Understanding (MOU) related to the planned development of a 400,000 barrel-per-day world-class, full-conversion refinery in Jubail, Saudi Arabia, Aramco said in a statement.

The companies will each hold an ownership interest of 35 percent in a new joint venture company. A plan to let the remaing 30 percent of the company go to investors from public is still subject to regulatory approval.

The refinery will be designed to process Arabian heavy crude and produce high-quality refined products.

Abdallah S. Jum'ah, Saudi Aramco's president and chief executive officer was enthusiastic about the joint project.

This project represents an excellent opportunity to build on the Kingdom’s strategy of addressing global energy demand while attracting foreign investment to expand its economy.

The Jubail project will become one of two joint venture refineries that will be built in Saudi Arabia. Aramco is also expected to sign an agreement by the end of May with U.S.-based ConocoPhilips to set up a 400,000 bpd refinery in Yanbu, Saudi Arabia.

The Jubail project is scheduled to start up in 2011.