Aramco to Start Construction of China Complex by June
Saudi Arabian Oil Co. (Aramco) said Sunday a deal has been reached to begin in the second quarter the construction of its production complex in China that includes a refinery with a capacity of 300,000 barrels per day (bpd).
The project in Northeast China also includes a petrochemical plant with an annual maximum output of 1.65 million metric tons of ethylene and two million metric tons of paraxylene, the primarily state-owned giant said.
“Construction is due to start in the second quarter of 2023 after the project secured the required administrative approvals”, Aramco said in a press release. “It is expected to be fully operational by 2026”.
The company, which owns 30 percent of the joint venture developing the project, said it will supply up to 210,000 bpd of petroleum to the complex in Liaoning province’s Panjin city. China North Industries Group Corp. Ltd. (Norinco Group) holds 51 percent of the Huajin Aramco Petrochemical Company joint venture and Panjin Xincheng Industrial Group has the remaining 19 percent.
“This important project will support China’s growing demand across fuel and chemical products”, Mohammed Y. Al Qahtani, Aramco executive vice-president of downstream, commented in the announcement.
Energy consumption in the world’s second-biggest economy is estimated to have amounted to 5.41 billion tons of standard coal equivalent last year, up 2.9 percent from 2021, according to data from China’s National Bureau of Statistics.
Zou Wenchao, deputy general manager of Norinco Group, said: “This large-scale refinery and petrochemical complex is a key project of NORINCO Group to implement and realize the joint development of the high-quality Belt and Road initiative, promote industrial restructuring, and enhance the oil and petrochemical sector to become stronger, better and larger”.
East Asia Expansion
Al Qahtani added the project “also represents a major milestone in our ongoing downstream expansion strategy in China and the wider region, which is an increasingly significant driver of global petrochemical demand”.
Aramco said December it has entered heads of agreement with China Petroleum and Chemical Corp. for a greenfield project in Fujian province that includes a refinery with a capacity of 320,000 bpd and a 1.5 million tons-per-year petrochemical cracker complex.
Earlier in the same month it said it had signed a memorandum of understanding with Shandong Energy Group on integrated refining and petrochemical operation in China. The agreement “includes a potential crude oil supply agreement and chemicals products offtake agreement, supporting Aramco’s role in building a thriving downstream sector in Shandong Province”, Aramco said in a press release December 9.
Aramco already has an operating business in China in Fujian Refining and Petrochemical Co. Ltd., where it owns 25 percent. ExxonMobil holds 25 percent and Fujian Petrochemical Co. has the remaining 50 percent. The refinery can produce up to 280,000 bpd.
In South Korea, Aramco through its S-OIL affiliate has increased investment into a plant in Ulsan city that eyes to produce up to 3.2 million tons of petrochemicals yearly.
“The $7 billion Shaheen project aims to convert crude oil into petrochemical feedstock and would represent the first commercialization of Aramco and Lummus Technology’s TC2C thermal crude to chemicals technology, which increases chemical yield and reduces operating costs”, Aramco said in a press release November, calling the plant its largest investment in South Korea. “It follows an earlier $4 billion investment into the first phase of the petrochemical expansion completed in 2018”.
The project broke ground earlier this month and is expected to be completed by 2026.
To contact the author, email jov.onsat@gmail.com
Photo Credit – iStock.com/elbold
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