SABIC Announces Final Investment Decision for Petrochemical Complex in Fujian, China

Riyadh - Saudi Basic Industries Corporation (SABIC) has officially announced its final investment decision on January 21st to proceed with the development of a world-scale petrochemical complex situated in Fujian, China. The project is a collaboration between SABIC Industrial Investment Co., a wholly-owned subsidiary with a majority stake of 51%, and Fujian Fuhua Gulei Petrochemical Co. LTD., holding a 49% ownership interest.

According to a statement released by the company, the petrochemical complex will encompass a mixed feed steam cracker with an estimated annual ethylene production capacity of up to 1.8 million tons.

The project will also feature state-of-the-art downstream facilities, including units for ethylene glycols (EG), polyethylene (PE), polypropylene (PP), polycarbonate (PC), and other advanced technologies. Notably, out of the nine technologies employed, nine are proprietary to SABIC.

With an estimated cost of approximately $6.4 billion, construction for the complex is expected to commence in the first half of 2024. The preparation for commissioning and start-up will follow in the second half of 2026, spanning a duration of six months. SABIC foresees the financial impact of the project to be reflected in its results following the first half of 2027, after the commencement of commercial production and project completion.

The venture aims to support SABIC's strategic goals of diversifying feedstock sources and expanding its manufacturing presence in Asia, which is a vital market for a wide range of products, as stated in the official release.

It is worth noting that Aramco Trading Co., a wholly-owned subsidiary of Saudi Arabian Oil Company (Saudi Aramco), is a related party in the project. Saudi Aramco holds a 70% ownership stake in SABIC through one of its subsidiaries, Aramco Chemicals Co.

SABIC plans to finance the project through a combination of debt and the company's cash flows, according to the announcement.

The establishment of the petrochemicals complex in Fujian is a result of a memorandum of understanding (MoU) signed between SABIC and the Fujian Provincial Government of the People's Republic of China back in September 2018.

This investment signifies another significant milestone for SABIC as it expands its global footprint and strengthens its position in the petrochemical industry.