UPDATE 2-Saudi SABIC says agrees $1 bln JV with Mitsubishi

* SABIC, Mitsubishi Rayon sign initial JV deal

* Estimated cost at $1 bln, production expected in 2013

* Plant's main product is used in LCD screens

(Adds further details, CFO, background)

RIYADH, Aug 10 (Reuters) - Saudi Basic Industries Corp 2010.SE (SABIC) said on Monday it has signed a letter of intent with Japan's Mitsubishi Rayon 3404.T to set up a methyl joint venture with an estimated cost of $1 billion.

The Saudi plant would produce 250,000 tonnes per year of methyl methacrylate (MMA) monomers and is expected to start production in 2013, SABIC, the world's biggest petrochemicals producer by market value, said in a statement.

MMA is used in the production of acrylic resins needed for products ranging from liquid crystal displays and car lights to aquariums.

The 50-50 joint-venture will also produce annually 30,000 tonnes of polymethyl methacrylate (PMMA), a plastic often used as an alternative to glass in the construction or transport sector, it added.

Mutlaq al-Morished, vice president for corporate finance, declined to comment on a report by Japanese newspaper Nikkei that, prior to the launch, SABIC would take a 10-20 percent stake in Lucite International [LUCIT.UL].

Mitsubishi Rayon bought the British chemical maker for $1.6 billion in May, the paper said.

SABIC only said the plant would use a process commercialised by Lucite.

SABIC said it would be responsible for providing raw materials such as ethylene and methanol and both firms would consider producing more products, although it gave no details.

SABIC usually does better in terms of profitability than rivals like Dow Chemical (DOW.N) and Germany's BASF BASF.DE because it purchases feedstock at lower prices, analysts say. ($1=97.27 Yen) (Reporting by Ulf Laessing and Inal Ersan; editing by Simon Jessop)