Saudis, China Announce Joint Petrochemical Project

The Saudi Basic Industries Corporation (SABIC) on Sunday announced an investment plan to build a petrochemical complex in China’s Fujian province, in cooperation with the Fujian Fuhua Gulei Petrochemical company.

Chinese state media celebrated the announcement as evidence that China and Saudi Arabia are growing closer, both economically and politically.

China’s state-run Global Times hailed the SABIC Fujian Petrochemicals Company created by Sunday’s announcement as an example of “the fruitful industrial cooperation between China and Saudi Arabia.”

The Global Times looked at Saudi Arabia’s $6.4 billion investment in the Fujian project as the petrochemical engagement ring for a geopolitical romance built upon the Saudis feeding China’s voracious appetite for fossil fuels.

Analysts quoted by the Chinese paper pointed to other agreements between big Chinese corporations and Aramco, the Saudi national oil company, as other signs of the increasing harmony between Beijing and Riyadh.

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China and Saudi Arabia signed about $25 billion worth of agreements at an economic conference in Beijing in December, covering energy, agriculture, mining, finance, technology, and many other areas. SABIC was among the companies attending the conference.

Aramco is the majority owner of SABIC, which has investments and facilities across the world. 

“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,” added Saudi Chinese Business Council chairman Mohammed A. al-Ajlan, belatedly adding a little green energy flourish to China’s lust for Saudi oil.

The SABIC Fujian complex is expected to produce ethylene, a vitally important industrial chemical derived from natural gas. Ethylene is employed in creating a variety of petrochemical products, ranging from plastics and synthetic rubber to antifreeze.

SABIC said on Monday construction will begin on the Fujian plant during the first half of 2024, to be completed sometime in late 2026. Production of ethylene and other chemicals is scheduled to begin in the first half of 2027.