SABIC to proceed with $6.4bn Fujian petrochemical complex in China

SINGAPORE (ICIS)–Saudi petrochemical giant SABIC has made a final investment decision (FID) on a joint venture $6.4bn manufacturing complex in Fujian in southern China.

The complex will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP), polycarbonate (PC), among others, SABIC said in statement on 21 January.

SABIC Fujian Petrochemicals Co (SFPC) – a 51:49 joint venture between SABIC Industrial Investment Co, a wholly owned SABIC subsidiary, and Fujian Fuhua Gulei Petrochemical – will operate the project.

Based on the project’s environment impact assessment report document approved in June 2022, the expected PE and PP capacities would be 1m tonnes/year and 950,000 tonnes/year, respectively.

Construction is expected to begin during the first half of 2024, with start-up to commence from the second half of 2026 and will last for six months, SABIC said.

“The FID is a significant milestone for SABIC’s business expansion and development in China,” SABIC CEO Abdulrahman Al-Fageeh said.

“The project aims to support our goal of diversifying our feedstock sources and establishing a petrochemical manufacturing presence in Asia for a wide range of products,” he said.

China is the world’s second-biggest economy and remains a major importer of petrochemicals despite strong capacity additions in recent years.

SABIC’s other major investments in China include three compounding plants  – in Shanghai, Guangzhou and Chongqing; a joint venture with Sinopec in Tianjin; a technology center in Shanghai; and a customer centre office in Guangzhou.

The company is 70%-owned by energy giant Saudi Aramco, which is the world’s biggest crude exporter.

Aramco has been taking strategic stakes in Chinese refining and petrochemical projects since last year as it aggressively expands downstream, in line with a diversification strategy under its Vision 2030.

Among the major deals sealed and completed in 2023 was the $3.4bn acquisition of a 10% stake in Chinese producer Rongsheng Petrochemical, which has a majority stake in Zhejiang Petroleum and Chemical Co Ltd’s (ZPC) integrated and petrochemical complex.

ZPC can process 800,000 bbl/day of crude oil, with an ethylene capacity of 4.2m tonnes/year.

Focus article by Fanny Zhang

Thumbnail image: Shandong Free Trade Zone, Qingdao, China – 1 January 2024 (Costfoto/NurPhoto/Shutterstock)