Sinopec Corp. and Saudi Aramco have commenced construction on a major refinery and petrochemical complex in southeast China’s Fujian province, signifying a significant milestone in China’s ongoing petrochemical expansion initiatives.
Valued at approximately 71.1 billion yuan ($9.82 billion), this project represents Saudi Aramco’s second substantial refining and petrochemical partnership with a Chinese state-owned oil company, further strengthening its collaboration with China’s private sector.
Located in the Gulei Industrial Park in Zhangzhou City, the complex will feature a refinery with a capacity of 16 million metric tons per year (tpy) (equivalent to 320,000 barrels per day), a 1.5 million tpy ethylene plant, a 2 million tpy paraxylene facility, and a 300,000-ton crude oil terminal, according to a statement from Sinopec.
This initiative aligns with Aramco’s strategy to expand its global downstream operations and increase crude oil supply to China by 1 million barrels per day as part of its oil-to-chemicals investments, noted Mohammed Y. Al Qahtani, Aramco’s Downstream President.
Ownership of the venture will be divided among Fujian Petrochemical, a joint enterprise between Sinopec and the Fujian government, which will hold 50%, and Saudi Aramco and Sinopec, each holding a 25% stake.
Scheduled for completion by 2030, the facility is expected to produce 5 million tons of petrochemical feedstock annually upon reaching full production.
This project, referred to as Gulei Phase Two, builds on a smaller ethylene complex Sinopec launched in 2021 in partnership with a Taiwanese investor.
Sinopec recently inaugurated a 1.2 million tpy ethylene complex in northern China and is constructing another plant of similar capacity in Zhenhai, eastern China.
In addition to the Sinopec-Aramco venture, Saudi Basic Industries Corp. (SABIC) is collaborating with a local government-backed firm to build a $6.4 billion petrochemical complex in the same industrial park.
These projects add to a series of petrochemical investments initiated in China since 2018, led by private enterprises such as Rongsheng Holdings, Hengli Group, and Jiangsu Shenghong Group, as the country aims to bolster its self-sufficiency in petrochemical production.