Saudi Aramco eyes further chemical investments in China with local partners

SINGAPORE (ICIS)–China has a “vitally important” place in Saudi Aramco’s global investment strategy, with the energy giant actively developing additional investment opportunities with its Chinese partners in the chemicals sector, Aramco president and CEO Amin Nasser said.

The global oil major’s strategic goals in chemicals are “well-aligned” with China’s, he said in a keynote speech at the China Development Forum in Beijing on 25 March, noting that the country “is already a powerhouse representing 40% of global [chemical] sales”.

Aramco, through its chemicals arm SABIC, is planning to increase its liquids-to-chemicals throughput to 4m barrels per day by 2030, Nasser said.

Saudi Aramco accelerated its push into China’s refining and petrochemical sector last year with strategic investments that are aligned with Saudi Arabia’s Vision 2030 diversification goals.

This includes the 10% stake acquisition in Rongsheng Petrochemical Co for $3.4bn last year.

Saudi Aramco, together with Chinese partners Norinco Group and Panjin Xincheng Industrial Group (PXIG), is also building a 300,000 bbl/day refining and ethylene-based steam cracking complex in Panjin City, in northeast China’s Liaoning province at a cost of around $12bn.

The Liaoning project is expected to come online in 2026.

“We are also pleased that SABIC’s partnership in Fujian is on-track to commence construction of a major chemicals facility at an estimated cost of $6.4 billion,” Nasser said.

The Fujian complex will include a mixed-feed steam cracker with up to 1.8m tonne/year ethylene (C2) capacity and various downstream units producing ethylene glycols (EG), polyethylene (PE), polypropylene (PP) and polycarbonate (PC), among other products.

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 centre in Shanghai and a customer centre office in Guangzhou.

SUSTAINABLE DEVELOPMENT
Demand for lower greenhouse gas emissions (GHG) materials – especially advanced composites and non-metallics in general – is growing rapidly, Nasser noted.

Aramco’s research efforts in developing GHG materials are consistent with Chinese President Xi Jinping’s stance that sustainable development is the “golden key” for future success, he said.

“We agree with China’s pragmatic and prudent approach to energy transition…I believe there are wide-ranging opportunities to jointly develop advanced GHG emission reduction technologies.”

China has distinct strengths in renewables and critical materials, while Aramco and Saudi Arabia have a clear interest in solar, wind, hydrogen, and electro fuels, Nasser said.

“These areas have great long-term potential, and combining our strengths could match our ambitions,” he added.

Focus article by Nurluqman Suratman