China-Saudi petrochemical firms to set up $6.4b complex in Fujian

Saudi petrochemical giant Saudi Basic Industries Corp (SABIC) announced on Sunday its final investment plan for establishing a petrochemical complex in East China’s Fujian Province, together with a local Chinese company, according to the company on Monday.

The substantial investment for the project is about 44.8 billion yuan ($6.4 billion), the largest one-time foreign investment ever in Fujian.

This collaboration reflects a strategic effort to achieve mutually beneficial outcomes, Niu Xinchun, an expert with the China-Arab research institute of Ningxia University, told the Global Times on Monday.

According to SABIC, this project is to support SABIC’s aspiration of diversifying the company’s feedstock sources and expanding its manufacturing presence in Asia as a key market for a wide range of products.

The complex will consist of a mixed feed steam cracker with an expected maximum annual ethylene capacity of 1.8 million tons and world-class downstream facilities including ethylene glycols, polyethylene, polypropylene, polycarbonate and several other units using world-leading technologies, with nine technologies from SABIC.

“Saudi Arabia aims to tap into the expansive Chinese market, addressing the oversupply of petrochemical products, while China seeks foreign capital and technological input from Saudi Arabia for enhanced energy security and industrial advancement,” Niu said.

In the traditional sector, Saudi Arabia is the main supplier of oil to China, and cooperation between the two countries is great in this sector, including petrochemicals, Mohammed A. Al Ajlan, chairman of the Saudi Chinese Business Council, told the Global Times in an exclusive interview, while mentioning the recent signing of agreements between Saudi Aramco and Chinese companies such as Rongsheng and Eastern Xinghong.

Moreover, Saudi Arabia has strong strategies and directions toward the transition to a green economy and renewable and clean energy. Since China is one of the leading countries in the global new-energy sector, opportunities for developing investment and partnerships in this field are promising, the chairman said.