Saudi Aramco, Sinopec to study capacity expansion at Fujian refinery

Saudi Aramco said March 8 it and China's state-owned Sinopec are to study possible capacity expansion at the 280,000 b/d Fujian refinery.

The two companies will undertake a feasibility study looking into "optimization and expansion of capacity", Saudi Aramco said in a statement. The company was not available for comment on the volume of planned capacity addition.

The agreement, signed through Aramco subsidiary Saudi Aramco Asia Company Limited, will "support" Sinopec's "refinery feedstock optimization and downstream petrochemical development," the Chinese company's president, Yu Baocai, said.

"[It will offer] new opportunities to deepen and expand activity amid an accelerating global energy transition," he said.

Saudi Aramco, the world's largest oil-exporting company, has significant interest in China's downstream sector as it looks to lock in demand for its crude in Asia's largest economy.

The company has previously restarted discussions on a joint project to build a 300,000 b/d refining and petrochemical complex in Northeast China.

Aramco initially signed a deal with China's North Industries Group (Norinco) and Panjin Sincen during a visit by Crown Prince Mohammed bin Salman to Beijing in February 2019 to form Huajin Aramco Petrochemical Co. and build a $10 billion integrated refining and petrochemical complex in Panjin city, Liaoning province.

Oil prices are currently trading at their highest levels since 2008 with Platts-assessed Dated Brent at $130.045/b on March. 7.

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.