Petrochemical giant Saudi Basic Industries Corporation (SABIC) announced on January 22 that it has made a final investment decision (FID) on SABIC’s Fujian petrochemical complex (Sino-Saudi Ethylene Project). The project is expected to have a total investment of approximately 44.8 billion yuan (approximately 6.4 billion U.S. dollars). It is the largest one-time foreign investment project in Fujian Province to date, and is also one of SABIC’s core investment initiatives in China.

The foreign shareholders reached the final investment decision, marking that the construction of this world-class petrochemical project will be fully launched. As a key project of China-Saudi Arabia production capacity and investment cooperation, the China-Saudi Arabia Gulei Ethylene Project officially signed a joint venture contract in August 2021. According to the contract, SABIC’s wholly-owned subsidiary Saudi Industrial Investment Company and Fujian Fuhua Gulei Petrochemical Co., Ltd. controlled by Fujian Energy and Petrochemical Group established Fujian Zhongsha Petrochemical Co., Ltd. with an equity ratio of 51:49. In the first half of 2022, the project received approval from relevant national ministries and commissions and the Fujian Provincial Development and Reform Commission.

The Zhongsha Gulei Ethylene Project is located in the Gulei Petrochemical Base in Zhangzhou, Fujian, one of the seven largest petrochemical bases in the country. It will build a mixed-feed ethylene steam cracker with an annual ethylene production capacity of up to 1.8 million tons, as well as a series of downstream production The plant, which includes ethylene glycol, polyethylene, polypropylene, polycarbonate and other production units, is expected to be completed in 2026. Its products will meet the growing demand for high-end chemical products in the fields of electronics and electrical, artificial intelligence, smartphones, communications, medical, automobiles and new materials.

China is currently the world's largest chemicals market, accounting for 40% of all global chemical sales, and is expected to account for nearly half by 2030. This is the premise why major international chemical giants are still vying to seize the Chinese market despite the cold wave in the chemical industry in recent years.

While some production lines in Europe are being closed, investment in the Chinese market by BASF, the world's largest chemical company and the German chemical giant, continues to grow. BASF announced in 2018 that it will build a new integrated base in China, which will be independently operated by BASF and will be located in Zhanjiang, Guangdong. The Zhanjiang integrated base is BASF's largest single investment project to date, with a total investment of approximately 10 billion euros. Recently, the first batch of equipment at the base was completed.

Also in Guangdong, in November 2021, the ExxonMobil Huizhou ethylene project with a total investment of approximately US$10 billion officially started construction. The first phase of the project is expected to be completed and put into production by the end of 2024.

Although oversupply and weak demand currently cover the entire industry, SABIC CEO Abdulrahman Al-Fageeh told The Paper in a previous interview that in the long term, the downstream demand of the chemical industry will It will definitely develop as the demand for consumer goods continues to grow.