Saudi Aramco, the world's largest oil-exporting company, will start construction this year of a major integrated refinery and petrochemical complex in northeast China.
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Construction of the complex located in Panjin City, Liaoning Province, will begin in Q2 following completion of administrative approvals, the company said in a March 26 statement following CEO Amin Nasser's visit to Beijing.
The complex, which will receive 210,000 b/d of crude from Aramco, is expected to be fully operational by 2026.
Aramco has a 30% interest in the complex through the Huajin Aramco Petrochemical Co., with NORINCO Group holding 51% and Panjin Xincheng Industrial Group the remaining 19% interest.
The project represents " a major milestone in our ongoing downstream expansion strategy in China and the wider region, which is an increasingly significant driver of global petrochemical demand," Mohammed al-Qahtani, Aramco executive vice president of downstream, said in the statement.
During an investor call to discuss Aramco's 2022 financial results, Aramco's Nasser said that a significant share of external investments was tied into its capex for 2022 and 2023 with the company continuing to prioritize downstream assets in large markets such as China.
"We think China will continue to grow in terms of demand. We have a number of investments, but we cannot declare right now, but hopefully in the next one to two years, even through 2023, we are going to have a number of investments in China," he said March 16.
"We have been for some time negotiating. Some of it is grassroots and some of it is existing assets that we have, and we are reaching a good stage in our negotiation to finalize the agreement for these investments," he added.
Saudi Arabia is China's top crude supplier with most of the country's refineries designed to crack Middle East crudes.
China is central to Aramco's strategy to diversify into more specialized high-value chemical products and less carbon intensive hydrocarbon usage, under which it has said it plans to convert up to 4 million b/d of crude oil to chemicals.
The Saudi company signed a number of agreements with Chinese entities in December during the visit of President Xi Jinping to Riyadh.
The deals covered a potential crude supply agreement and chemical offtake agreements.