Aramco to go ahead with a new Chinese refinery and petrochemical complex. (Credit: Eagleamn at English Wikipedia)

Saudi Arabian Oil Company (Aramco) has taken the final investment decision (FID) to develop a refinery and petrochemical complex in China, in partnership with North Huajin Chemical Industries Group and Panjin Xincheng Industrial Group.

The three parties had created a joint venture (JV) called Huajin Aramco Petrochemical Company (HAPCO) to build the integrated liquids-to-chemicals complex in Panjin City, Liaoning province.

As per the JV agreement signed in 2019, the total value of the refinery and petrochemical project will be over $10bn.

Aramco will have a stake of 35% in the JV, while North Huajin Chemical Industries Group, which is a subsidiary of Norinco Group, will own a 36% stake. Panjin Xincheng Industrial Group will hold the remaining stake of 29%.

Aramco is expected to provide crude oil feedstock of up to 210,000 barrels per day of to the Chinese refinery and petrochemical complex.

Slated to begin operations in 2024, the downstream project will have a refinery with a capacity of 300,000 barrels per day (bpd) and an ethylene-based steam cracker with a capacity of 1.5 million metric tonnes per annum (mmtpa).

The facility will help meet China’s increasing demand for energy and chemical products, said Aramco.

Aramco downstream senior vice-president Mohammed Al Qahtani 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. It will further support Aramco’s broader objective of becoming a global leader in liquids-to-chemicals.”

Aramco said that the FID is conditional on finalising the transaction documentation, receipt of regulatory approvals, and closing conditions.

Earlier this week, Aramco, through its subsidiary Saudi Aramco Asia, signed a memorandum of understanding (MoU) with China Petroleum & Chemical (Sinopec) for potential downstream partnership in China.

Aramco and Sinopec also agreed to back their existing JV Fujian Refining and Petrochemical in carrying out a feasibility study into the optimisation and expansion of capacity.