SABIC, Aramco, Sinopec to develop the viability of the petrochemical complex
RIYADH: Saudi Basic Industries Corp. has signed a memorandum of understanding with energy giant Saudi Aramco and China Petroleum & Chemical Corp., known as Sinopec, to assess the economic and technical feasibility of developing an integrated petrochemical complex with an existing refinery in Yanbu.
In a statement to the Saudi Stock Exchange, SABIC stated that this MoU would be valid for 18 months.
The signing of the MoU comes just days after China strengthened its relationship with Saudi Arabia during Chinese President Xi Jinping’s visit to the Kingdom.
Jinping noted that China will also expand oil trade with Saudi Arabia and added that his visit will act as a historic milestone for Chinese relations with the energy-rich Middle East.
In addition to the deal with SABIC, Sinopec, in December, also signed a framework agreement with Saudi Aramco to build a Phase II 16 million ton-year refining project and 1.5 million ton-year ethylene units in Gulei, Fujian.
“These projects represent an opportunity to contribute to a modern, efficient and integrated downstream sector in China and Saudi Arabia. They also underline our long-term commitment to remain a reliable supplier of energy and chemicals to Asia’s largest economy,” said Aramco Senior Vice President of Downstream, Mohammed Y. Al Qahtani, in a statement.
Aramco said the announcements will support its role as a reliable energy supplier to China as the company seeks to expand its liquids-to-chemicals capacity to 4 million barrels per day by 2030. a world-leading energy and petrochemical corporation that provides quality products and reliable energy.
Sinopec President Yu Baocai, earlier in a statement, said that its cooperation with Saudi Arabian entities “has reached a new milestone through the existing cooperation, which demonstrates the mutual trust and recognition of all parties, and strengthens their confidence to deal with the energy transition together. ”
Earlier in November, SABIC together with Saudi Aramco signed an initial agreement with the Polish refining company PKN Orlen to explore the potential of joint investments in petrochemical projects in Poland and other European markets.
Last month, SABIC announced that it intends to build a plant to convert crude oil into petrochemicals, taking advantage of growing demand.
In a statement given to the Tadawul, SABIC noted that the crude-to-chemicals complex in Ras Al Khair is expected to convert 400,000 barrels per day of oil into chemicals.
Saudi Aramco owns 70 percent shares in SABIC and has invested billions of dollars in downstream projects and petrochemical facilities.
Earlier in December, Saudi Aramco partnered with French oil major TotalEnergies to build a petrochemical facility in Saudi Arabia with an estimated investment of around $11 billion.
A joint press release issued by the companies noted that the petrochemical facility named ‘Amiral’ will be owned and integrated with the existing SATORP refinery in Jubail on the eastern coast of the Kingdom.
Construction work on the Jubail petrochemical facility will begin in the first quarter of 2023, and is expected to be operational by 2027. The facility is also expected to create over 7,000 direct and indirect jobs.