November 18, 2024 [Reuters]- Sinopec Corp and Saudi Aramco have started constructing a refinery and petrochemical complex in southeast China’s Fujian province, marking another big investment in the country’s recent wave of petrochemicals expansions.

The complex, estimated to cost 71.1 billion yuan ($9.82 billion), also marks Saudi Aramco’s second major refining and petrochemical joint venture with a Chinese state oil major as the Middle Eastern energy company steps up cooperation with private Chinese companies.

The new venture, located in Gulei industrial park of Zhangzhou city, includes a 16 million metric ton-per-year (tpy), or 320,000 barrels per day, refinery, a 1.5 million tpy ethylene plant, a 2 million paraxylene facility as well as a 300,000 tonnage crude oil terminal, Sinopec said in a statement.

For Aramco, it is another step towards growing its downstream business outside the kingdom and is part of a plan to supply a million bpd of crude oil to China for oil-to-chemicals investments, Aramco’s downstream president Mohammed Y. Al Qahtani was cited as saying.

Fujian Petrochemical – a joint venture between Sinopec and the Fujian government – will hold a 50% stake in the venture, and Saudi Aramco and Sinopec will each own 25%, Sinopec said.

The project is slated to become operational in 2030, and once in production, it will be able to supply 5 million tons of petrochemical feedstock annually.

Sinopec and Aramco signed a preliminary agreement to build the complex two years ago.

This is so-called Gulei phase two, an expansion from a smaller-sized ethylene complex Sinopec brought onstream in 2021 in a joint-venture with a Taiwanese investment company.

Sinopec launched last week 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 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