China, Saudi Arabia photo:VCG

Saudi petrochemical giant Saudi Basic Industries Corp (SABIC) announced on Sunday its final investment plan for establishing a petrochemical complex in East China's Fujian Province, together with a local Chinese company, according to the company's statement on its official WeChat account on Monday.

The substantial investment for the project is about 44.8 billion yuan ($6.4 billion), which is the largest one-time foreign investment ever in Fujian.

This collaboration exemplifies the fruitful industrial cooperation between China and Saudi Arabia, reflecting a strategic effort to achieve mutually beneficial outcomes, with China being a vast consuming market and Saudi Arabia being a major oil supplier as well as a booming market, Niu Xinchun, an expert with the China-Arab research institute of Ningxia University, told the Global Times on Monday.

SABIC Fujian Petrochemicals Co - a 51:49 joint venture between SABIC Industrial Investment Co, a wholly owned SABIC subsidiary, and Fujian Fuhua Gulei Petrochemical - will operate the project.

According to SABIC, this project is to support SABIC's aspiration of diversifying the company's feedstock sources and expanding its manufacturing presence in Asia as a key market for a wide range of products.

The complex will consist of a mixed feed steam cracker with an expected maximum annual ethylene capacity of 1.8 million tons and world-class downstream facilities including ethylene glycols, polyethylene, polypropylene, polycarbonate and several other units using world-leading technologies, with nine technologies from SABIC.

Construction of the project is expected to begin during the first half of 2024, while preparations for commissioning and start-up will commence in the second half of 2026 and last for six months.

 "On the one hand, Saudi Arabia aims to tap into the expansive Chinese market, addressing the oversupply of petrochemical products, while on the other hand, China seeks foreign capital and technological input from Saudi Arabia for enhanced energy security and industrial advancement," Niu said.

In the traditional sector, Saudi Arabia is the main supplier of oil to China, and cooperation between the two countries is great in this sector, including petrochemicals, Mohammed A. Al Ajlan, chairman of the Saudi Chinese Business Council, told the Global Times in an exclusive interview, while mentioning the recent signing of agreements between Saudi Aramco and Chinese companies such as Rongsheng and Eastern Xinghong.

Moreover, Saudi Arabia has strong strategies and directions toward the transition to a green economy and renewable and clean energy. Since China is one of the leading countries in the global new-energy sector, opportunities for developing investment and partnerships in this field are promising, the chairman said.

Global Times