Saudi Aramco has signed an agreement with Norinco Group and Panjin Sincen to form a joint venture to establish a $10bn, fully integrated refining and petrochemical complex in Panjin, Liaoning Province, China.
The investment of more than $10bn will make it the largest Sino-foreign joint venture.
The partners will form a new company, Huajin Aramco Petrochemical, as part of a project that will include a 300,000barrels per day (bpd) refinery with a 1.5 million metric tonne per annum (mmtpa) ethylene cracker and a 1.3mmtpa PX unit.
Saudi Aramco will supply up to 70% of the crude feedstock for the complex, which is expected to commence operations in 2024.
The Saudi Arabian company will hold 35% stake in the newly formed company, with Norinco and Panjin holding 36% and 29% stake, respectively.
Additional plans have also been prepared to establish a fuels retail business, which will integrate into the value chain.
By the end of 2019, Saudi Aramco, North Huajin and Liaoning Transportation Construction Investment Group are expected to form a three-party marketing joint venture company to develop a retail fuel stations network in the target markets.
Saudi Aramco has also signed three MoUs aimed at expanding its downstream presence in the Zhejiang Province.
The company intends to acquire a 9% stake in Zhejiang Petrochemical’s 800,000bpd integrated refinery and petrochemical complex in Zhoushan.
The first agreement was signed with the Zhoushan government to acquire its 9% stake in the project and the second agreement was with Rongsheng Petrochemical, Juhua Group and Tongkun Group, the other shareholders of Zhejiang Petrochemical.
Saudi Aramco will be involved in the project under a long-term crude supply agreement and the ability to use Zhejiang Petrochemical’s crude oil storage facility to serve its customers in Asia.
The third agreement was signed with Zhejiang Energy to invest in a retail fuel network. The companies plan to build a large-scale retail network over the next five years in the Zhejiang Province.
The retail business will be integrated with the Zhejiang Petrochemical Complex for the refined products.
Phase I will involve the construction of a 400,000bpd refinery with a 1.4mmtpa ethylene cracker unit and a 5.2mmtpa Aromatics unit, while Phase II will involve a 400,000bpd refinery expansion.
Image: Saudi Aramco president and CEO Amin Nasser (centre) with Norinco Group chairman Jiao Kaihe (left) and Liaoning Province Governor Tang Yijun (right) in Beijing, China. Photo: Courtesy of Saudi Arabian Oil Co.