Saudi Aramco Partners with China to Build an Oil Refinery for $12.2 Billion

Lavina Daryanani
Source: Google Images

Saudi Aramco recently signed an agreement with Chinese partners to work on an oil refinery and petrochemical project. The refinery will be based in northeast China and it is expected to become fully operational in 2026. The refinery will be able to house around 300,000 barrels a day. This initiative is set to empower the nation’s growing demand for chemicals and fuel. Partner Panjin Xicheng Industrial Group reportedly revealed in a statement on WeChat that the project will cost about 83.7 billion yuan [$12.2 billion].

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Construction to begin in Q2, 2023

According to an official statement, Huajin Aramco Petrochemical Company [HAPCO] will build the joint venture and control operations. In fact, it is expected to hit an annual production capacity of 1.65 million tonnes of ethylene and 2 million tonnes of paraxylene. Furthermore, it is worth noting that Chinese military equipment maker NORINCO Group owns 51% of HAPCO, while Aramco and Panjin Xincheng have 30% and 19% shares respectively.

Construction at the complex will kickstart in the second quarter of this year. It will take place after the project checks all the required administrative approval boxes. Additionally, Aramco will supply up to 210,000 barrels per day of crude oil as feedstock for the plant.

Parallelly, Aramco also signed a Memorandum of Understanding with the southern Chinese province of Guangdong recently. In fact, according to a post on the provincial government’s website, this is being done to explore cooperation in sectors like energy, finance, research, and innovations. The latest deal comes on the back of the company reporting a profit of $161.1 billion in 2022.

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