Aramco, SINOPEC Launch Works on Fujian PetChem Project
Development of China’s petrochemical sector gained further momentum with Saudi Aramco, one of the world’s leading integrated energy and chemicals companies, along with China Petroleum & Chemical Corporation (SINOPEC), and Fujian Petrochemical Company Limited (FPCL) broke ground on a new integrated refining and petrochemical complex in Fujian Province, China.
Estimated to cost around $10 billion, this project is Saudi Aramco’s second major refining and petrochemical joint venture with a Chinese state oil major, and expected to be fully operational by the end of 2030.
The facility, located in Gulei industrial park of Zhangzhou city, will have a 16 million tons-per-year oil refining unit (320,000 barrels per day), a 1.5 million tons-per-year ethylene unit, a two million tons paraxylene and downstream derivatives capacity, and a 300,000-tons crude oil terminal.
FPCL, for which Sinopec and Aramco signed a preliminary agreement to build the complex two years ago, is a 50:50 joint venture between SINOPEC and Fujian Petrochemical Industrial Group Company, will own a 50% stake in the complex, with Aramco and SINOPEC each taking a 25% stake.
Growing Investments in China
Mohammed Y. Al Qahtani, Aramco Downstream President, said that building on Aramco’s strong relationships with both SINOPEC and Fujian Petrochemical, and the ground-breaking further expands its growing downstream investment portfolio in China.
“We will supply in excess of one million barrels per day of our crude oil to these high chemical conversion assets in China, reinforcing Aramco’s role as a reliable and long-term partner in China’s development. This also advances our liquids-to-chemicals strategy through which we intend to direct more of our crude towards helping meet rising global petrochemicals demand,” he said.
SINOPEC Chairman Ma Yongsheng said that the two companies were committed to promote high-quality development of the petroleum and petrochemical industry. Aramco’s participation supplies long-term reliable and competitive feedstock for the project and further boosts the healthy development of Gulei Petrochemical Base.
Successful cooperation in this project marks a new milestone in the China-Saudi all-weather strategic partnership, with a focus on greater domestic circulation and in line with the dual circulation strategy, he added.
According to Reuters report, SINOPEC last week launched a new 1.2 million TPY ethylene complex in northern China, and is building another similar-sized plant in east China’s Zhenhai.
Separately also in Gulei industrial park, Saudi Basic Industries Corp (SABIC) is set to build a $6.4 billion petrochemical complex in a tie-up with a local government-backed company.
All these investments are in addition to a separate stream of projects China has added since 2018, which were led by private firms such as Rongsheng Holdings, Hengli Group and Jiangsu Shenghong Group, as China seeks to become self-sufficient in petrochemicals, the report added.
