By Christian Moess Laursen


Saudi Arabia's national oil company, Aramco, and Chinese oil-and-gas giant Sinopec started building a refining and petrochemical complex in China's southeastern Fujian province, as Aramco continues to expand its downstream portfolio in the country.

The companies said in a joint statement Monday that the facility is planned to have a refining unit with capacity for 320,000 barrels a day, an ethylene unit that can produce 1.5 million metric tons a year, a 2-million-ton paraxylene facility and a 300,000-ton crude-oil terminal. Paraxylene is a feedstock to manufacture other industrial chemicals.

Part of the company's strategy is to expand its downstream business in what it calls high-growth geographies such as China, India and Southeast Asia. Aramco aims to supply more than one million barrels of crude oil a day to advanced chemical processing facilities in China.

In recent years, Aramco has been active in acquiring stakes in Chinese petrochemical companies. Last year, it signed a preliminary agreement to buy a stake in Shandong Yulong Petrochemical and bought a 10% stake in Rongsheng Petrochemical, while it is currently in discussions to acquire a 10% stake in the petrochemical unit of China's Hengli Group.

In addition, Aramco signed last month a framework pact with Vietnam's oil and gas company Petrovietnam to collaborate on storage, supply and trading of energy and petrochemical products.

Aramco had a net chemicals production capacity of 59.6 million tons a year as at Dec. 31, 2023.

Fujian Petrochemical--a joint venture between Sinopec and Fujian Petrochemical Industrial Group--will own a 50% stake in the new complex, with Aramco and Sinopec each taking a 25% stake.

The project is expected to be fully operational by the end of 2030. Sinopec and Aramco signed a preliminary agreement to build the complex two years ago.


Write to Christian Moess Laursen at christian.moess@wsj.com


(END) Dow Jones Newswires

11-18-24 0729ET