The Saudi Basic Industries Corporation (SABIC) announced in a statement to the stock exchange on Sunday that it has decided to proceed with the construction of a petrochemical complex in the Fujian province of southeastern China, contributing to the strengthening of Saudi relations with China, the world's largest oil importer. The project is expected to cost around $6.4 billion and is part of a joint venture with the state-owned Fujian Fuhua Juyi Petrochemical Company.
This joint venture was first proposed in 2018 and is the latest in a series of partnerships between Saudi companies and Chinese refineries. SABIC anticipates that the complex will be capable of producing 1.8 million metric tons of ethylene annually, aiming to enhance SABIC's presence in the petrochemical industry in Asia as a major market through a wide range of products.
Construction of the complex is expected to begin in the first quarter of 2024, with completion anticipated in the first quarter of 2027. This announcement follows a number of similar investments by Saudi oil giant Aramco in the refining and distribution sector in China.
In early January, it was reported that the private-sector Chinese refiner Rongsheng Petrochemical and Aramco were in discussions to acquire a 50% stake in each other's refineries in China and Saudi Arabia. Aramco previously announced its approval to acquire a 10% stake in Rongsheng, a related investment associated with a 20-year crude oil supply agreement with Zhejiang Petrochemical, which is controlled by Rongsheng. An agreement was reached in July at a valuation of $3.4 billion.
In September of last year, Aramco announced plans to become a strategic investor in another private Chinese refinery, Jiangsu Shrexon Petrochemical, which operates a refinery with a capacity of 320,000 barrels per day and a petrochemical complex in Jiangsu province, eastern China. Aramco is also in talks to acquire a 10% stake in Shandong Yulong Petrochemical, which is building a refinery complex capable of processing 400,000 barrels of crude oil per day in Shandong province, eastern China.
