Saudi Aramco has signed a memorandum of understanding with Zhejiang Petroleum & Chemical Co. Ltd., also known as Zhejiang Petrochemical Co. Ltd. (ZPC), to acquire ownership interest in ZPC’s grassroots 40 million-tonne/year refining and chemical integrated complex currently under construction in Zhoushan, Zhejiang Province, China (OGJ Online, Feb. 14, 2017).
The MOU, signed on Oct. 18, follows a crude oil supply agreement Aramco recently signed with ZPC, said Abdulaziz Al Judaimi, Aramco’s senior vice-president of downstream operations.
The proposed investment follows Aramco’s objective of seeking major joint-venture partnerships in a growing portfolio of refining and petrochemical assets in China as part of the company’s commitment to key global markets, Al Judaimi added.
Since 2006, no supplier has delivered more oil to China to date than Aramco, the company said.
The overall investment program into downstream Chinese operations follows Aramco’s broader downstream strategy, which aims to enhance the value of the hydrocarbon resource base by targeting increased horizontal and vertical integration across the hydrocarbon value chain to deliver a strategically integrated downstream network and robust portfolio more resilient to market turbulence, according to the company.
Further details regarding the proposed ZPC partnership were not disclosed.
The first 20 million-tpy phase of ZPC’s complex—which also will produce 1.4 million tpy of ethylene—is due for startup by December, while Phase 2—which will nearly double processing and production capabilities at the site—is scheduled for commissioning during first-quarter 2021 (OGJ Online, Mar. 16, 2018).
In late May, ZPC completed installation of major equipment for the complex’s 3.5 million-tpy diesel hydrocracking unit, which followed installation of Phase 1’s 10 million-tpy atmospheric-vacuum distillation tower No. 2 in late May, the operator said in releases on May 26 and Apr. 24, respectively.
ZPC—a joint venture of China-based Rongsheng Holding Group Co. Ltd., Juhua Group Corp., Tongkun Group Co. Ltd., and Zhoushan Marine Comprehensive Development Investment Co. Ltd.—previously said it would invest about 160 billion yuan to complete both phases of the project (OGJ Online, June 5, 2017).
As originally proposed, the refining complex was to be configured to process a mix of light, medium, and heavy crudes from Saudi Arabia and Iran, as well as Brazilian Frade, according to a 2016 environmental impact assessment for the project posted to the city of Zhoushan’s official government web site (OGJ Online, May 11, 2017).
Contact Robert Brelsford at [email protected].
