(Bloomberg) — Abu Dhabi National Oil Co. and Dutch chemical producer OCI NV are in advanced talks to combine their Middle Eastern fertilizer businesses, people with knowledge of the matter said.

An agreement between the state-owned energy company and OCI could be announced as soon as the coming days, the people said, asking not to be identified because the information is private.

“OCI continually considers strategic initiatives regarding its portfolio, including possible partnerships,” OCI said in a statement Friday, after Bloomberg News reported on the talks. “In this context, OCI confirms that it is in discussions with ADNOC on a possible cooperation relating to each company’s MENA fertilizer assets. There can be no assurance that any transaction will ultimately take place.”

A spokesman for Adnoc wasn’t immediately available for comment.

Adnoc has been expanding its downstream operations and bringing in partners for businesses including its pipeline network and refining unit. It has also listed its distribution unit and agreed in October to sell a 5% stake in its $11 billion drilling business to Baker Hughes.

The emirate of Abu Dhabi, home to about 6% of the world’s crude reserves, has been seeking to diversify an economy that’s dependent on oil. The potential tie-up with OCI, run by Egyptian billionaire Nassef Sawiris, comes as the fertilizer industry starts to recover after a spurt of plant expansions swamped the market with new supply.

Any transaction would add to the $122 billion of chemical-related deals announced this year, data compiled by Bloomberg show.

Shares of OCI have risen 36% in Amsterdam trading this year, giving it a market value of 5.1 billion euros ($5.7 billion).

Deal Talks

Adnoc Fertilizers was set up in 1980 to make urea for agricultural use. It sells its products to local and international markets, including the Indian subcontinent, the U.S., Latin America, Australia and Europe. French energy giant Total SA holds a 33% stake in Adnoc Fertilizers, according to its website.

OCI owns a plant in Egypt with capacity to produce about 1.65 million metric tons of granular urea per year, according to its latest annual report. It also has a 60% stake in another Egyptian production complex that makes anhydrous ammonia, as well as a trading arm in the United Arab Emirates. OCI’s fertilizer venture in Algeria can produce about 1.6 million metric tons of gross anhydrous ammonia and 1.26 million metric tons of granular urea annually.

CF Industries Holdings Inc. abandoned a plan to buy OCI’s nitrogen-fertilizer business in 2016 after new U.S. guidelines curbed its ability to use the deal to move its headquarters to a more tax-friendly location, a so-called tax inversion.

OCI held talks earlier this year about a potential sale of its methanol assets to Saudi Basic Industries Corp. in a deal that could have valued the business at as much as $4 billion, Bloomberg News reported in March. The Dutch company’s largest shareholder is Sawiris, who is Egypt’s richest person with a fortune of about $6.7 billion, according to the Bloomberg Billionaires Index.