Saudi Aramco, Norinco Group, and Panjin Xincheng Industrial Group Co. Ltd. (PXIG) are starting construction of their joint venture Huajin Aramco Petrochemical Co.’s (HAPCO) proposed 300,000-b/d refining and ethylene-based steam cracking complex in Panjin City, Liaoning province, China.
With administrative approvals secured, the integrated refining complex—which also will be able to produce 1.65 million tonnes/year (tpy) of ethylene and 2 million tpy of paraxylene—is set to begin construction in second-quarter 2023 and be fully operational by 2026, Aramco said on Mar. 27
Aramco previously confirmed it will supply up to 210,000 b/d of crude oil feedstock for HAPCO to process into a variety of fuels and base petrochemicals used in manufacturing to help meet China’s growing demand for energy, chemical, and everyday products.
Aramco first announced its intent to form HAPCO in February 2019 as part of a $10-billion agreement with Norinco and Panjin Sincen for development of the HAPCO-operated Panjin integrated complex, which then was to include a 1.5-million tpy ethylene cracker and 1.3-million tpy paraxylene unit.
As originally agreed, Aramco was to hold 35% interest in the HAPCO JV, with Norinco and Panjin Sincen to hold 36% and 29% interest, respectively.
Under the current plan, Norinco will own 51% interest. Aramco and PXIG will hold 30% and 19%, respectively.
Interest acquisition
Confirmation of the HAPCO project approval comes alongside Aramco’s separate Mar. 27 release that Aramco Overseas Co. signed agreements to acquire 10% interest in Rongsheng Petrochemical Co. Ltd. affiliate Zhejiang Petrochemical Co. Ltd.’s (ZPC) 800,000-b/d refining and chemical integrated complex in Zhoushan, Zhejiang Province, China.
As part of the $3.6-billion deal, Aramco said it would supply 480,000 b/d of Arabian crude oil to the complex under a long-term sales agreement.
The proposed transaction involves an off-market secondary sale of Rongsheng shares by majority shareholder Zhejiang Rongsheng Holding Group Co. Ltd., with potential for future collaboration in trading, refining, chemicals production, and technology licensing, according to Aramco.
In addition to finished petroleum products, ZPC’s Zhoushan integrated complex—China’s largest—produces 4.2 million tpy of ethylene.
The JVs also secure a reliable outlet for Arabian crude production. Combined, the HAPCO JV and proposed Rongsheng partnership would result in Aramco supplying 690,000 b/d of crude to high chemical-conversion Chinese assets.
Robert Brelsford | Downstream Editor
Robert Brelsford joined Oil & Gas Journal in October 2013 as downstream technology editor after 8 years as a crude oil price and news reporter on spot crude transactions at the US Gulf Coast, West Coast, Canadian, and Latin American markets. He holds a BA (2000) in English from Rice University and an MS (2003) in education and social policy from Northwestern University.
