Sinopec-owned Fujian refinery to add a new ethylene plant: sources

Chinese state-owned Sinopec plans to add a petrochemical plant to its 280,000 b/d Fujian refining complex as part of its phase two expansion plans, according to a company source.

"An ethylene plant will likely be added," the source said, without giving more details as the plans were still at an early stage.

The refinery usually operates at around 70% of its nameplate capacity, below the average run rates of 80% at plants operated by Sinopec.

The new chemical plant will likely help lift the overall run rates at the refinery, sources said.

On March. 8, Saudi Aramco and Sinopec said they would study possible capacity expansion at the 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.

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 $137.64/b at 4:30 pm London time on March. 8.

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.