Page 8 - DMEA Week 10 2022

DMEA COMPANIES DMEA

Aramco signs MoU with Sinopec

for downstream collaboration

MIDDLE EAST FOLLOWING reports that it was considering confirmed that the company was considering
further investments in China, Saudi Aramco investments in China and follows reports that it
this week signed a memorandum of understand- has resumed talks to build a $10bn refining and
ing (MoU) with China Petroleum & Chemical petrochemicals complex at Panjin in north-east-
Corp. (Sinopec) for potential downstream ern China’s Liaoning Province.
collaboration. Originally announced in 2017 as part of
The deal, signed through Aramco’s Asian China’s One Belt, One Road international infra-
subsidiary, will also see the companies seek to structure initiative, Aramco agreed a deal with
support feasibility studies for the expansion China North Industries Group Corp. (Norinco)
of the Fujian Refining and Petrochemical Co. for the development of facilities with a projected
(FREP), a 280,000 barrel per day (bpd) facility in refining capacity of 300,000 bpd alongside
which Aramco holds a 63.4% share. 1.5mn tonnes per year of ethylene and 1.3mn
According to Aramco, the agreement “pro- tpy of paraxylene.
vides a basis for continued downstream col- In line with the company’s strategy of increas-
laboration between Aramco and Sinopec, ing the number of crude outlets dedicated to its
capitalising on each company’s strengths and crude production, Aramco intends to supply
their long-term relationship through existing 70% of the facility’s feedstock, taking a 35% stake
joint ventures, namely FREP and Sinopec Sen- in the project, with Norinco subsidiary Huajin
mei (Fujian) Petroleum Co. (SSPC) in China, holding 36% and the local-government owned
and Yanbu Aramco Sinopec Refining Co. [YAS- Sincen the remaining 29%.
REF] in Saudi Arabia.” The Saudi firm’s participation came to an end
The latter is a 430,000 bpd joint venture (JV) in 2020 when it slashed capital expenditure in
refinery in which Aramco holds 62.5% with Sin- response to low oil prices and the coronavirus
opec holding the remaining 37.5%. (COVID-19) outbreak, and its stake was trans-
Aramco’s senior-vice president of down- ferred to Huajin, which established a joint ven-
stream Mohammed Al Qahtani said: “Such ture with Sincen late that year.
collaborations promote our downstream inte- Quoting sources close to the project, Argus
gration and expansion strategy in Asia and sup- Media said that the JV kicked off construction of
port our broader objectives of becoming a global the facility in Q3 2021, with the petrochemical
leader in liquids-to-chemicals and a resilient and units having now been expanded to a planned
reliable supplier of one of the lowest upstream 1.65mn tpy of ethylene and 2mn tpy of parax-
carbon intensity oils to meet China’s growing ylene, raising the cost of the project to just under
demand.” $12bn.
Meanwhile, Sinopec President Yu Baocai
said: “The signing of this MoU will support our Shortly before going to press, Aramco
refinery feedstock optimisation and downstream announced that it had taken a final investment
petrochemical development, while offering new decision on the Panjin refinery and set up Hua-
opportunities to deepen and expand activity jin Aramco Petrochemical Co. (HAPCO) joint
amid an accelerating global energy transition.” venture with North Huajin Chemical Industries
The announcement comes just weeks after Group Corporation and Panjin Xincheng Indus-
Aramco’s president and CEO Amin Nasser trial Group ™

P8 www. NEWSBASE .com Week 10 10•March•2022