Saudi Aramco, world’s largest oil-exporting company, said on Thursday that its joint venture in China will develop a major integrated refinery and petrochemical complex in North East China.
Aramco had entered into an agreement with North Huajin Chemical Industries Group Corporation and Panjin Xincheng Industrial Group in December 2019 to form Huajin Aramco Petrochemical Company.
The group will develop the liquids-to-chemicals complex in Panjin city in China’s Liaoning province, Aramco said in a statement.
The new greenfield project will have 300,000 barrels per day refinery capacity and petrochemical units and is expected to commence operations in 2024.
This project will support Aramco’s broader objective of becoming a global leader in liquids-to-chemicals, Mohammed Al Qahtani, Aramco’s senior vice-president of downstream, said.
“China is a cornerstone of our downstream expansion strategy in Asia and an increasingly significant driver of global chemical demand.
“Continued energy security remains a shared priority and this partnership represents another major milestone in our journey together, supporting China’s vision to create a modern economy grounded in innovation, ambition and sustainability,” Mr Al Qahtani said.
The decision is subject to the finalisation of transaction documentation, regulatory approvals and closing conditions.
The new complex will feed China’s growing demand for energy and chemical products and presents an opportunity for Aramco to supply up to 210,000 bpd of crude oil feedstock to the complex.
Earlier this week, Aramco signed a preliminary agreement with China Petroleum and Chemical Corporation for a potential downstream (refining and petrochemicals) collaboration to boost its presence in the world’s second-largest economy.
Last month, it closed the $15.5 billion lease and leaseback deal for its gas pipeline that it had agreed to in December with a group of companies led by BlackRock Real Assets and state-backed Hassana Investment Company.
The consortium for the gas pipeline transaction also comprised institutional investors such as China Merchants Capital and Silk Road Fund, among others.
Saudi Aramco also said last month that it discovered a number of new natural gasfields in different parts of the country including in the central region, the Empty Quarter, near the northern border and in the eastern region of the country.