Saudi Aramco will build a major integrated refinery and petrochemical complex in China with local partners as part of its downstream expansion strategy.
Aramco's CEO Amin Nasser signed the agreement in Beijing on Sunday to start the construction of the complex, along with NORINCO Group and Panjin Xincheng Industrial Group.
Construction is due to begin in the second quarter and the project is expected to be fully operational by 2026, the state-owned oil major said in a statement.
Huajin Aramco Petrochemical Company (HAPCO), the joint venture between Aramco (30%), NORINCO Group (51%) and Panjin Xincheng Industrial Group (19%), will develop the complex that will combine a 300,000 barrels per day (bpd) refinery and a petrochemical plant with annual production capacity of 1.65 million metric tons of ethylene and 2 million metric tons of paraxylene.
Aramco will supply up to 210,000 bpd of crude oil feedstock to the complex, which is being built in the city of Panjin, in China’s Liaoning province.
The project is estimated to cost $10 billion, according to Reuters.
“This important project will support China’s growing demand across fuel and chemical products. It also 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,“ said Mohammed Al Qahtani, Aramco's Executive Vice President of Downstream.
(Reporting by Brinda Darasha; editing by Cleofe Maceda)