Saudi Aramco intends to capitalise on China’s expanding energy demand by investing 10 billion dollar in a petrochemical & refining complex over the following 3 years.
According to a press statement from Aramco, the facility would have a daily capability of 300k barrels of crude. The plant will receive 201k barrels every day from the Saudi major.
Aramco and 2 Chinese businesses will collaborate to complete the project. The project is expected to be finished in 2026, and construction work should start in the 2nd half of 2023.
This significant undertaking will help China meet its rising need for chemical and fuel goods. According to Mohammed Al Qahtani, head of downstream at Aramco. “It also marks a critical turning point in our ongoing downstream expansion plan in China and the wider are. Which is an increasingly prominent driver of worldwide petrochemical demand.”
It follows another story from Dec of previous year that claimed Aramco had agreed to partner with Sinopec to develop a 320k Barrels Per Day (bpd) refinery and petrochemical cracker there. Once again underscoring China’s significant contribution to the world’s oil consumption.
Saudi Aramco & China Complex Deal are attracting New Foreign Investors
Aramco has prioritised investments in petrochemicals & refining. As it works to ensure long-term demand for its main item while also increasing local refining capability.
The IEA and other predictors claim that investing in petrochemicals is a smart long-term move for the oil sector given predictions of a drop in the demand for oil as transportation fuels.
Moreover, according to International Energy Agency (IEA) predictions. Petrochemicals will account for more than a 3rd of the increase in oil demand by 2030 and will account for 50% of the need by 2050. As transportation becomes electrified.
But, if the anticipated worldwide transport electrification does not occur on the anticipated scale. This increase petrochemical need will only be add to the overall oil demand, including for transportation fuels.
The most obvious location for fresh petrochemical projects is China because it is both 1 of the top 3 users of crude oil and the country that imports the most of it.