Saudi Aramco, China JV to build refinery complex Saudi Aramco, China JV to build refinery complex
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Aramco, China JV to start work on petrochem complex

Aramco, China JV to start work on petrochem complex

The state-owned oil giant will supply up to 210,000 bpd of crude oil feedstock to the complex, which is being built in China’s Liaoning province

Aramco, HAPCO JV

Saudi Aramco said its joint venture (JV) in China plans to start the construction of a major integrated refinery and petrochemical complex in the northeast of the country.

The venture, Huajin Aramco Petrochemical Company (HAPCO), is developing the complex that will combine a 300,000 barrels per day (bpd) refinery and a petrochemical plant with an annual production capacity of 1.65 million metric tons of ethylene and two million metric tons of paraxylene.

Aramco holds a 30 per cent shareholding in HAPCO while China’s NORINCO Group owns a 51 per cent stake and the other 19 per cent is owned by Panjin Xincheng Industrial Group.

Construction is due to start in the second quarter of 2023 after the project secures the required administrative approvals. It is expected to be fully operational by 2026.

Saudi 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.

“This important project will support China’s growing demand for 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 Y Al Qahtani, Aramco executive vice president of downstream.

Aramco’s Chinese partnership

Aramco, China JVMeanwhile, Aramco’s president & CEO Amin Nasser told the China Development Forum 2023 on Sunday that the company is doubling down on China’s energy supply including new lower carbon products, chemicals and advanced materials – all supported by emissions reduction technologies.

“We see a major win-win opportunity to build a world-leading, integrated downstream sector in China, with special emphasis on the high conversion of liquids directly into chemicals as part of our broader liquid-to-chemicals business expansion plans,” Nasser said.

Aramco wants to be an all-inclusive source of energy and chemicals for China’s long-term energy security and China’s high-quality development, he added.

An initial framework agreement for the Liaoning refinery was first signed in March 2017 during Saudi Arabian King Salman bin Abdulaziz Al Saud’s visit to Beijing.

The oil major said its capital expenditure surged 18 per cent year-on-year to $37.6bn in 2022 as progress continues on multiple fronts to deliver reliable, affordable and more sustainable energy. It expects its spending in 2023 to range between $45bn and $55bn including external investments.

The company is also expanding its production capacity by a million barrels per day to 13 million barrels by 2027 and will increase gas production by more than 50 per cent by 2030 – which would add an extra one million bpd of oil for export.

Reducing carbon footprint

Aramco aims to achieve net zero emissions from its operations by 2050. The oil giant unveiled a $1.5bn sustainability fund to support an inclusive global energy transition last October to invest in the technology needed to support a stable and inclusive energy transition. The fund plans to invest in technologies that support the company’s net-zero 2050 ambition in its wholly-owned operational assets and the development of new lower-carbon fuels.

Read: Saudi Aramco plans to set up powertrain JV with Renault, Geely

Nasser said Aramco is also partnering with Baoshan Iron & Steel Company to produce steel plates with a lower carbon footprint in Saudi Arabia. The company also created a joint venture with French automaker Renault and China’s Geely Automobile Holdings to create a powertrain venture.

The joint venture will have an annual production capacity of more than five million internal combustion, hybrid and plug-in hybrid engines and transmissions per year.

With a market capitalisation of SAR7.1tn as of March 26, 2023, reported a record net income of SAR604.1bn for 2022, a 46.5 per cent increase from $110bn a year earlier on higher oil prices, increased volumes sold and improved margins for refined products.

Read: Saudi Aramco profit surges to $161.1bn in 2022, raises dividend

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