China, Saudi JV project starts construction
The new integrated refining and petrochemical complex in Fujian — the province's largest industrial investment to date that kicked off construction on Monday — underscores the deepening ties between China and Saudi Arabia in the energy sector, said industry experts and company executives.
The second phase of the Fujian Gulei integrated refining and petrochemical project, a collaboration between China Petroleum &Chemical Corp (Sinopec), Saudi Arabian Oil Co (Saudi Aramco) and Fujian Petrochemical Co Ltd (FPCL), is expected to be fully operational by 2030, said Sinopec.
The facility, a significant milestone in China-Saudi energy collaboration, aims to have a 16 million ton-per-year (320,000 barrels per day) oil refining unit, a 1.5 million ton-per-year ethylene unit, 2 million tons in paraxylene and downstream derivatives capacity, and a 300,000-ton crude oil terminal, it said.
An analyst said the project aligns with Saudi Aramco's strategy to expand its downstream footprint in key markets like China while bolstering China's energy security by ensuring a stable supply of crude oil and feedstock for its domestic industry.
"By integrating refining and petrochemical operations, the partnership enhances mutual economic interdependence, positioning Saudi Arabia as a long-term supplier of crude oil to China's rapidly growing petrochemical industry," said Wang Lining, director of the oil market department under the economics and technology research institute of China National Petroleum Corp (CNPC).
"For China, the project supports its ambitions to transition its petrochemical industry toward higher value-added products and greener, more sustainable operations. The integration of advanced technologies and large-scale infrastructure will strengthen the competitiveness of the petrochemical base in Fujian, elevating it as a model for high-end industrial clusters," Wang said.
"As Fujian's largest industrial investment, the project is expected to act as a catalyst for local economic development. It will create jobs, attract downstream investments and enhance the regional supply chain, contributing to Fujian's broader industrial transformation."
Wang added that China and Saudi Arabia are expected to further tap potential for bilateral cooperation, strengthening collaboration in areas such as energy, infrastructure construction, digital economy and green development.
Economic ties between Saudi Arabia and China have been growing stronger over the past few years, with both sides stepping up efforts strengthening multilateral cooperation to enhance the global economic governance system.
Figures released by the General Administration of Customs show that Saudi Arabia has been the largest trading partner of China in the Middle East since 2001, with bilateral trade reaching $107.23 billion in 2023.
China and Saudi Arabia have maintained positive cooperative communication under the framework of the Economic and Financial Subcommittee of the High-level Chinese-Saudi Joint Committee, with many practical outcomes achieved, said Saudi Finance Minister Mohammed Al-Jadaan, adding that the Saudi side looks forward to enhancing the alignment of development strategies with China to realize mutual development and prosperity.
Mohammed Y. Al Qahtani, Aramco's downstream president, said the project would further expand Saudi Aramco's growing downstream investment portfolio in China.
"We will supply in excess of 1 million barrels per day of our crude oil to these high chemical conversion assets in China, reinforcing Aramco's role as a reliable and long-term partner in China's development," he said.