Riyadh, Saudi Arabia–Saudi Basic Industries Corp announced its final investment decision today, Jan. 21, to proceed with developing a petrochemical complex in Fujian, China.
SABIC Industrial Investment Co., a wholly owned subsidiary of the Saudi petrochemical giant, will own 51% of the project and Fujian Fuhua Gulei Petrochemical Co. Ltd. will have 49% ownership of the joint venture, the company said in a statement.
The complex will consist of a mixed feed steam cracker with an expected annual ethylene maximum capacity of up to 1.8 million tons, the company said in a statement.
It also said the project will feature world-class downstream facilities to produce ethylene glycols (EG), polyethylene (PE), polypropylene (PP), polycarbonate (PC), and several other units using world-leading technologies, where nine technologies are from SABIC.
The project’s estimated cost is about $6.4 billion, said SABIC. The construction is expected to begin during the first half of 2024, while the preparation for commissioning and start-up will commence from the second half of 2026 and will last for six months.
SABIC expects the related financial impact to reflect on its results after the start of commercial production and project completion, which is anticipated in the first half of 2027.
The project aims to support SABIC’s aspiration in diversifying the company’s feedstock sources and expanding its manufacturing presence in Asia as a key market for a wide range of products, according to the statement.
Aramco Trading Co. is a related party. Aramco Trading is wholly owned by Saudi Arabian Oil Co. (Saudi Aramco) that owns 70% of SABIC through its subsidiary Aramco Chemicals Co.
SABIC also noted that it will finance the project through debt in addition to the company’s own cash flows.
In September 2018, SABIC signed a memorandum of understanding (MoU) with the Fujian Provincial Government of People’s Republic of China, which enables SABIC to develop a petrochemicals complex in Fujian.