Oil giant Aramco (2222) has started the construction of a refinery and petrochemical complex in Fujian Province, China, valued at approximately USD 10 billion, in collaboration with China Petroleum & Chemical Corporation (Sinopec), according to Reuters.
Strong Alliance
Sinopec announced on Monday that the project includes an oil refinery with a 16 million ton per annum capacity.
It will also feature an ethylene plant with a capacity of 1.5 million tons annually and a paraxylene facility with a capacity of 2 million tons.
Additionally, it will also include a crude oil terminal with a capacity of 300,000 tons.
So what
Aramco’s downstream president Mohammed Y. Al Qahtani said the project is another step for the company in expanding its operations outside of Saudi Arabia.
This is part of a broader plan to supply one million barrels of crude oil per day to China, investing in the conversion of oil into chemicals.
The complex marks the second major joint venture for refining and petrochemicals between Aramco and a major Chinese oil company.
This comes amid increasing collaboration between Aramco and private Chinese companies in recent years.
Some context
Sinopec noted that the “Fujian Petrochemical” joint venture, a collaboration between Sinopec and the Fujian government, will hold a 50% stake in the project. Aramco and Sinopec will each own 25%.
This makes it another significant investment as part of the recent wave of petrochemical expansions in China.
Now what
The project in the Gulei Industrial Park of Zhangzhou City will kick off operations by 2030.
Once production begins, it can supply five million tons of petrochemical feedstock annually.
Sinopec and Aramco signed a preliminary agreement to build the complex two years ago.
