Sinopec, Aramco Start Construction on $10B Petrochemical Complex in Fujian

Sinopec Corp and Saudi Aramco have commenced construction of a major refinery and petrochemical complex in Fujian province, China, with an estimated cost of 71.1 billion yuan ($9.82 billion). This marks Saudi Aramco’s second major joint venture with a Chinese state-owned oil company in refining and petrochemicals, strengthening its collaboration with Chinese enterprises. The project reflects China’s growing investment in its petrochemical sector, which has been expanding rapidly in recent years.

The complex is located in the Gulei industrial park in Zhangzhou city and will feature a 16 million metric tons-per-year (tpy) refinery, processing 320,000 barrels of crude oil daily. It will also include a 1.5 million tpy ethylene plant, a 2 million tpy paraxylene production unit, and a crude oil terminal with a 300,000-ton capacity. Sinopec announced that the Fujian provincial government holds a 50% stake in the venture, while Sinopec and Aramco each own 25%.

For Saudi Aramco, the project represents a key move in expanding its downstream operations outside of Saudi Arabia. The company aims to increase its crude oil supply to China, targeting up to one million barrels per day for oil-to-chemicals projects. Aramco’s downstream president, Mohammed Y. Al Qahtani, noted that this partnership is part of the company’s strategy to strengthen its presence in China’s petrochemical market.

The venture is expected to be operational by 2030, and once completed, it will produce 5 million tons of petrochemical feedstock annually. Sinopec and Aramco signed a preliminary agreement for the project two years ago, and the new facility will be an expansion of Sinopec’s previous ethylene complex in Gulei, which was launched in 2021 in partnership with a Taiwanese firm.

Sinopec has been expanding its petrochemical facilities across China. Last week, the company inaugurated a 1.2 million tpy ethylene complex in northern China and is constructing another similar-sized plant in Zhenhai, East China. These initiatives are part of China’s broader efforts to achieve self-sufficiency in petrochemical production.

In the same industrial park, Saudi Basic Industries Corp (SABIC) plans to invest $6.4 billion in a new petrochemical complex in collaboration with a local government-backed company. These projects reflect China’s ongoing push for self-reliance in petrochemical production, with significant investments from both state-owned and private companies.

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