Aramco, Chinese Partners Start Building Fujian Petrochemical Complex

China Petroleum & Chemical Corp. (Sinopec), Fujian Petrochemical Co. Ltd. (FPCL) and Saudi Arabian Oil Co. (Aramco) broke ground Monday for an integrated refining and petrochemical facility in the Chinese province of Fujian.

The complex is planned to have a crude oil refinery with a capacity of 16 million tons per annum (MMtpa) or 320,000 barrels a day, an ethylene unit with a 1.5 MMtpa capacity, a plant to produce two million tons of paraxylene and derivatives, and a 300,000-ton petroleum terminal, according to a statement by Aramco. The partners expect to reach full operation by the end of 2030.

FPCL, a 50:50 joint venture between Sinopec and Fujian Petrochemical Industrial Group Co., will hold a 50 percent stake in the complex. Aramco and Sinopec will take 25 percent each.

“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”, Aramco downstream president Mohammed Y Al Qahtani said.

“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”.

Last year Aramco and its co-venturers in Huajin Aramco Petrochemical Co. (HAPCO) launched construction for a refining and petrochemicals complex in the Chinese city of Panjin, as announced by the Saudi oil giant May 9, 2023. Aramco will supply up to 210,000 barrels per day (bpd) of crude to the facility, owned by HAPCO, where Aramco has 30 percent ownership. The Panjin complex is expected to be fully operational by 2026.

Earlier this year Aramco signed deals with two Chinese refiners laying the groundwork for potential stake acquisitions.

Signed as part of the visit to the kingdom of a delegation led by Premier Li Qiang, the agreements included “preliminary documentation relating to a Development Framework Agreement with Rongsheng Petrochemical Co. Ltd. (Rongsheng) and a Strategic Cooperation Agreement with Hengli Group Co., Ltd.”, Aramco said in a press release September 11, 2024.

“The preliminary documentation relating to a Development Framework Agreement with Rongsheng is connected to the potential joint development of an expansion of Saudi Aramco Jubail Refinery Company (SASREF) facilities”, said the statement on Aramco’s website.

The new pact between Aramco and Rongsheng advances the Cooperation Framework Agreement they inked April, under which they plan to form a joint venture within SASREF. The earlier agreement provides for Rongsheng’s potential acquisition of a 50 percent interest in the Aramco subsidiary and Aramco’s potential acquisition of a 50 percent stake in Rongsheng affiliate Ningbo Zhongjin Petrochemical Co. Ltd.

Aramco already holds a 10 percent stake in Rongsheng, after last year’s completion of an acquisition deal that involves the supply of 480,000 bpd of petroleum from the Gulf state to what Aramco said was China’s biggest integrated refining and chemicals plant.

Rongsheng holds a 51 percent interest in the owner of the plant, Zhejiang Petroleum and Chemical Co. Ltd. The plant can process up to 800,000 bpd of crude and produce up to 4.2 million metric tons of ethylene a year.

The other agreement signed during the Chinese delegation’s visit “advances talks relating to Aramco’s potential acquisition of a 10 percent stake in Hengli Petrochemical Co. Ltd., subject to due diligence and required regulatory clearances”, Aramco said.

“China is an important country in our global downstream growth strategy, and we look forward to building on a relationship that spans more than three decades to unlock new opportunities in this crucial market”, Al Qahtani said.

In 2023 Aramco signed agreements securing talks on its bids to acquire interests in two more Chinese downstream players. Aramco plans to have a 10 percent stake in Shandong Yulong Petrochemical Co. Ltd., as announced October 11, 2023, and another 10 percent stake in Jiangsu Shenghong Petrochemical Industry Group Co. Ltd., as announced September 27, 2023.

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