Energy News —Saudi Arabia’s SABIC Reaches Final Investment Decision On New Petrochemicals Complex in Fujian China
It’s a big week for the global petrochemicals market. In what has been a big developing story for the market, Saudi Arabia’s leading petrochemicals producer SABIC (70% owned by Saudi Aramco) announced the final investment decision (FID) for a new petrochemicals complex located in Fujian, China. According to the final terms of the deal provided by S&P Global Commodity Insights the FID for the construction project is worth $6.4 billion.
In a statement given to S&P Global about the FID, a SABIC spokesperson said: “This 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.”
These wide range of petrochemical products include ethylene, ethylene glycol, polyethylene, polypropylene and polycarbonate. Access the link to the report above to know more about the construction project and what it means for global market trends.
This story goes back to October 2023, when Saudi Aramco announced its intention to acquire a 10% stake in China’s petrochemical refinery to supply Shenghong Petrochemical with crude oil and other feedstocks. The two companies also discussed a potentinal strategic partnership that would allow for a large expansion project at the petrochemical and refinery compex in Jiangsu. Read the full details in the link.
This is not the only exciting news for China’s energy market as of late. China announced on 9 January 2024 that its most important national oil and gas producer, Sinopec, made new discoveries of a key exploration shale well located in Chongqing Municipality in the Southwest region of China.
Moreover, Yury Erofeev has consistently tracked China’s energy market and energy transition strategy in the publication Areas & Producers. Last week, he published China’s full 2023 import figures for coal, oil and natural gas.
In the report, he noted that:
“Of particular note is the import of coal, which increased by as much as 61.8% in 2023 to 474 million tons. This is a record volume. Before this, the historical maximum of coal imports was 327.02 million tons, which was reached in 2013 (the dynamics of Chinese coal imports are shown in the graph). At the same time, the average price per ton of imported coal in 2023 decreased by about 20%, which partly explains the increase in imports. Coal production within the country last year increased slightly — by 2.9% to 4.66 billion tons.”
This is a significant trend for the world’s largest energy consumer and importer. As coal demand rises, the world will have to patiently sit back and see what this means for the Chinese economy going forward.
However, by allowing foreign investment into China’s domestic energy production, this is at least a positive sign that the country is seeking to enhance its industrial policy by reducing its energy needs from foreign sources. Saudi Arabia will seek to seize every opportunity it can in China’s domestic energy market.
Read more about the Energy & Climate Change news updates in the publication Areas & Producers.
