pipeline-2019a.svg

Search

Categories

Huajin-web-photo.jpg

Saudi Aramco signs deal for $10 bln China refinery JV

Feb 24, 2019
3 min read
Print this page

Saudi Aramco agreed with China’s Norinco and Panjin Sincen to set up a $10 billion joint-venture refining and petrochemicals complex in China’s Liaoning province.

The partners will create a new company, Huajin Aramco Petrochemical Co. Ltd., as part of a project that will include a 300 thousand barrel per day refinery with a 1.5 million metric tonnes per annum (mmtpa) ethylene cracker and a 1.3 mmtpa PX unit, Aramco said in a statement.

Saudi Aramco will supply up to 70 per cent of the crude feedstock for the complex, which is expected to start operations in 2024.

The deal was signed during a visit by Saudi Crown Prince Mohammed bin Salman to Beijing as part of an Asia tour.

 “Our agreement…is a clear demonstration of Saudi Aramco’s strategy to move from beyond a buyer-seller relationship, to one where we can make significant investments to contribute to China’s economic growth and development,” said Saudi Aramco CEO, Amin Nasser. “Our participation in the integrated refining and petrochemical project in Panjin will strengthen our collaborative efforts to enhance energy security, revitalise key growth sectors and industries in Liaoning and also meet rising demand for products and goods in China’s Northeast region.”

Saudi Aramco will hold 35 per cent of the newly formed company, with NORINCO and Panjin holding 36 per cent and 29 per cent respectively.

There are additional plans to establish a fuels retail business, which will further integrate into the value chain. By the end of 2019, a three-party Marketing JV Company is expected to be formed between Saudi Aramco, North Huajin and Liaoning Transportation Construction Investment Group Co., Ltd. to develop a retail fuel stations network in the target markets.

 

ZHEJIANG PETROCHEMICAL

Separately, Saudi Aramco also signed three Memoranda of Understanding (MoUs) aimed at expanding its downstream presence in the Zhejiang province, one of the most developed regions in China.

The company plans to acquire a 9 per cent stake in Zhejiang Petrochemical’s 800,000 barrels per day integrated refinery and petrochemical complex, located in the city of Zhoushan.

The first agreement was signed with the Zhoushan government to acquire its 9 per cent stake in the project. The second agreement was signed with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, who are the other shareholders of Zhejiang Petrochemical.

Saudi Aramco’s involvement in the project will come with a long-term crude supply agreement and the ability to utilise Zhejiang Petrochemical’s large crude oil storage facility to serve its customers in the Asian region.

An integral part of the project includes a third agreement with Zhejiang Energy to invest in a retail fuel network. The companies plan to build a large scale retail network over the course of the next five years in the Zhejiang province. The retail business will be integrated with the Zhejiang Petrochemical complex as an outlet for the refined products produced.

Phase I of the project will include a newly built 400,000 barrels per day refinery with a 1.4 mmtpa ethylene cracker unit, and a 5.2 mmtpa Aromatics unit. Phase II will see a 400,000 barrels per day refinery expansion, which will include deeper chemical integration than Phase I.

 

Photo caption: President & CEO of Saudi Aramco, Amin Nasser (center) with Chairman of NORINCO Group, Jiao Kaihe (left) and Governor of Liaoning Province Tang Yijun (right) in Beijing, China

dmg events Global Energy Exhibitions & Conferences