State-run oil and gas company Saudi Aramco has signed an agreement to form a joint venture (JV) with the Chinese company Norinco (China North Industries Corporation) and Panjin Sincen to jointly develop a US$10bn refining and petrochemical complex in the city of Panjin, in Liaoning (northern China). Saudi Aramco will own 35% of the newly formed Huajin Aramco Petrochemical company, with Norinco and Panjin Sincen holding 36% and 29%, respectively.
The JV will operate a 300,000 bbl/d refinery, which is expected to start commercial operations in 2024. 70% of the crude feedstock for the refining complex will be supplied by Saudi Aramco. The project will also include a 1.5 Mt/year) ethylene cracker and plans to set up a fuels retail business: a three-party marketing JV company will be established by the end of 2019 to develop a network of retail fuel stations.
This move fits into Saudi Aramco's current expansion strategy, which aims at focusing on the development of international operations. The company will not only push into overseas exploration and production, i.e. upstream activities, but will also build up a portfolio across the value chain and expand its activities in the midstream and downstream sectors. In January 2019, it announced its intention to acquire a 19.9% stake in South Korea's fourth largest oil refining company Hyundai Oil.
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