Saudi chemical giant SABIC and China's Fujian Petrochemical agree on $6.4 billion partners

Saudi Basic Industries Corporation (SABIC), the world's leading diversified chemical company, will build a petrochemical complex in Fujian province in southeastern China to bolster Saudi Arabia's relationship with China, the world's largest oil importer, EqualOcean has learned. The project, which is expected to cost about $6.4 billion, will be developed in a joint venture with state-owned Fujian Fuhua Gulei Petrochemicals.

Headquartered in Riyadh, Saudi Arabia, Saudi Basic Industries Corporation (SABIC) has manufacturing facilities in a wide range of countries including the Americas, Europe, the Middle East, and Asia Pacific, with products ranging from chemicals, general purpose and high-performance plastics, and agricultural nutrients. SABIC currently operates in 17 cities in Greater China, with three plants in Shanghai, Guangzhou and Chongqing, as well as a R&D center in Shanghai and a Greater China customer service center in Guangzhou. In addition, SABIC has joined with Sinopec and Fujian Energy and Petrochemical Group to establish two joint ventures in Tianjin and Fujian, namely Sino-Sha (Tianjin) Petrochemical Company Limited (SSTPC) and Fujian Sino-Sha Petrochemical Company Limited.

Fujian Sino-Saudi Petrochemical Co., Ltd. will be constructed in Fujian Gulei Industrial Park with a total project investment of approximately US$6.4 billion and is expected to be completed in the first quarter of 2027. The complex will include a mixed-feed ethylene steam cracker with an expected ethylene capacity of up to 1.8 million tons per annum, as well as a range of world-class downstream production units, including glycol, polyethylene, polypropylene, polycarbonate and other production units.

Li Lei, SABIC's vice president and president of North Asia, said that SABIC's growth in China last year despite the impact of the epidemic and shortages demonstrated that demand in the Chinese market is very strong. China's petrochemical industry has grown from less than 10% of global demand thirty years ago to roughly 45% today, and it is expected that about 60% of the world's petrochemical industry investment will occur in China in the future. The project is also aimed at expanding SABIC's manufacturing operations in Asia and diversifying its feedstock supply chain by establishing a petrochemical base in Asia and producing a wide range of products.

The finalization of this investment decision marks a key milestone in the development of SABIC's joint venture in China. Based on the progress of the joint venture, SABIC will continue to expand its presence and help Saudi Arabia's 'Vision 2030' to be realized through technological innovations, providing customers with more products adapted to market needs and maximizing shareholder value.