Saudi Aramco makes FID on Panjin liquids-to-chemicals complex in China: company

Saudi Aramco has decided to move forward with a 300,000 b/d oil refinery and petrochemical project in northeast China, the company announced March 10, further cementing its commercial ties in Asia's largest economy.

Aramco said it had taken the final investment decision to develop a liquids-to-chemicals complex under a joint venture with North Huajin Chemical Industries Group Corp. and Panjin Xincheng Industrial Group.

The Saudi state-run company had withdrawn from the project in 2020, but S&P Global Commodity insights reported in September 2021 that the partners had revived negotiations.

The facility, to be built in the city of Panjin, will combine a 300,000 b/d refinery and an ethylene-based steam cracker, with Aramco supplying up to 210,000 b/d of crude oil feedstock. It is expected to be operational in 2024 and will cost some $10 billion.

"China is a cornerstone of our downstream expansion strategy in Asia and an increasingly significant driver of global chemical demand," Mohammed al-Qahtani, Aramco's senior vice president of downstream, said in a statement.

The announcement comes two days after Aramco and Sinopec said they were studying a possible capacity expansion at the 280,000 b/d Fujian refining complex, with sources telling S&P Global that an ethylene plant was likely to be added.

Saudi Arabia has in recent years sought greater access for its crude oil in China, Asia's largest economy.

Crown Prince Mohammed bin Salman made a state visit to Beijing in February 2019, where the Huajin Aramco Petrochemical Co. JV was formed to build the Panjin complex.

Saudi Arabia was China 's top crude supplier in 2021, delivering 1.76 million b/d, followed by Russia at 1.6 million b/d, according to data from China 's General Administration of Customs.