Riyadh-headquartered petrochemicals firm Sabic and Chinese firm Sinopec have signed an agreement to study joint venture petrochemical projects in China and Saudi Arabia, which target downstream key markets, such as automotive, electronics, lighting, and building and construction, packaging, and medical equipment.
The agreement is also planning to study a joint venture with Chinese investment in Saudi Arabia as well as to explore opportunities for further investments at the existing joint venture the two companies have: Sinopec Sabic Tianjin Petrochemical Company (SSTPC). Currently, SSTPC has a 1 million-tonne/year naptha cracker and other downstream units.
Sinopec said it was willing to work with Saudi Arabia closely on upstream exploration and development, oil field services, refining technology and engineering.
Last year, Sabic also tied up with Chinese producer Shenhua Ningxia Coal Industry Group (SNCG) to study the feasibility of setting up a coal-to-chemicals petrochemical complex in the Ningxia Hui region of China. The plant, to be confirmed in two years, will utilise locally available coal feedstocks to be supplied by SNCG.
Chairman of Sabic, Prince Saud, said of the recent agreement, “It will help align and integrate the Saudi Vision 2030 and China’s One Belt One Road initiative, opening up new prospects for wide cooperation between Sabic and Sinopec. The future will witness cooperation to achieve the visions of both countries’ leadership.”
Yousef Al-Benyan, Sabic’s Vice Chairman/CEO, said that the Chinese market has always been a key pillar of Sabic’s sales over the last 30 years.
“Today, we are entering a turning point in our strategic relationship and building on previous successes, such as studying the establishment of a coal-to-chemicals petrochemical complex with China’s Shenhua Ningxia Coal Industry Group. We hope these successes continue through strategic projects that contribute to the Saudi and Chinese leaders’ plans and meet the aspiration of their peoples,” he added.
This was one of the agreements signed during Saudi’s King Salman bin Abdulaziz Al-Saud’s recent visit to China. In total, the MOUs and letters of intent signed during the King’s visit are valued about US$65 billion and cover the energy, space and other areas, according to Chinese media.