Sinopec and Saudi Aramco upgrade cooperation, 28.8 billion yuan invested in Gulei Phase II
author: Ann
2025-04-30
According to Reuters, on Monday, China's state-owned oil giant Sinopec announced that it had reached an important cooperation with a subsidiary of Saudi Aramco. The two parties jointly established a joint venture with a registered capital of up to 28.8 billion yuan, aiming to fully promote the Fujian Gulei Phase II integrated project.
The cooperation agreement was signed by Sinopec, its subsidiary Fujian Refining and Chemical, and Saudi Aramco's Singapore subsidiary Aramco Asia Singapore Pte. (AAS). According to the agreement, the registered capital of the joint venture is 28.8 billion yuan, of which Sinopec will contribute 7.2 billion yuan in cash, accounting for 25% of the shares; Fujian Refining and Chemical will contribute 14.4 billion yuan, holding 50% of the shares; the remaining 7.2 billion yuan, or 25% of the shares, will be invested by AAS. At the same time, the terms of the agreement clearly stipulate that the lock-up period will be within 5 years after the completion of the project. During this period, the equity cannot be transferred without the consent of all parties, but AAS can transfer it to related parties.
The newly established joint venture, Fujian Sinopec Aramco Refining and Petrochemical Co., will carry out a number of businesses in the Gulei Port Economic Development Zone in Zhangzhou, Fujian Province, covering port operations, crude oil transportation, and various works related to the refining and chemical integration project. It is worth noting that Sinopec and Saudi Aramco had already started the construction of this project as early as November last year. This move is also a key part of Saudi Aramco's strategy to expand its overseas downstream business. Saudi Aramco actively promotes China's "oil-to-chemicals" development process by ensuring an average daily supply of 1 million barrels of crude oil.
The announcement issued by PetroChina pointed out that accepting AAS as a partner is of great significance to the Gulei Phase II project. On the one hand, it will help to ensure the supply of crude oil resources for the project and optimize the project financing structure; on the other hand, it can integrate the technical advantages of both parties and improve the level of regional resource coordination and optimization, which is very beneficial to improving the company's refining and chemical integration operation level and regional competitiveness.
It is reported that the total investment of the second phase of the Fujian Gulei Refining and Chemical Integration Project is as high as 71.1 billion yuan. It is not only a super-large energy investment project for the joint construction of the "Belt and Road", but also an important part of the new pattern of three-dimensional energy cooperation between China and Saudi Arabia. The project plans to build more than 30 refining and chemical units such as 16 million tons/year of refining, 1.5 million tons/year of ethylene, and 2 million tons/year of aromatics, as well as supporting public works and berths. It is worth mentioning that the project mainly adopts Sinopec's independently developed technology. After completion, it will effectively guarantee the stable supply of basic raw materials such as refining, ethylene, and aromatics at the Gulei Petrochemical Base.
In December 2022, during President Xi Jinping's state visit to Saudi Arabia, Sinopec and Saudi Aramco signed a cooperation framework agreement on the second phase of the Gulei Refining and Chemical Integration Project. On November 18, 2024, the project officially started construction and is expected to be fully put into production in 2030. The establishment of the joint venture between Sinopec and Saudi Aramco's subsidiary will undoubtedly inject strong impetus into the smooth progress of the Fujian Gulei Phase II integrated project. It also indicates that China-Saudi Arabia cooperation in the energy field has reached a new height. The future progress of both sides on the project and its impact on the regional economy and energy industry structure deserve continued attention.
The cooperation agreement was signed by Sinopec, its subsidiary Fujian Refining and Chemical, and Saudi Aramco's Singapore subsidiary Aramco Asia Singapore Pte. (AAS). According to the agreement, the registered capital of the joint venture is 28.8 billion yuan, of which Sinopec will contribute 7.2 billion yuan in cash, accounting for 25% of the shares; Fujian Refining and Chemical will contribute 14.4 billion yuan, holding 50% of the shares; the remaining 7.2 billion yuan, or 25% of the shares, will be invested by AAS. At the same time, the terms of the agreement clearly stipulate that the lock-up period will be within 5 years after the completion of the project. During this period, the equity cannot be transferred without the consent of all parties, but AAS can transfer it to related parties.
The newly established joint venture, Fujian Sinopec Aramco Refining and Petrochemical Co., will carry out a number of businesses in the Gulei Port Economic Development Zone in Zhangzhou, Fujian Province, covering port operations, crude oil transportation, and various works related to the refining and chemical integration project. It is worth noting that Sinopec and Saudi Aramco had already started the construction of this project as early as November last year. This move is also a key part of Saudi Aramco's strategy to expand its overseas downstream business. Saudi Aramco actively promotes China's "oil-to-chemicals" development process by ensuring an average daily supply of 1 million barrels of crude oil.
The announcement issued by PetroChina pointed out that accepting AAS as a partner is of great significance to the Gulei Phase II project. On the one hand, it will help to ensure the supply of crude oil resources for the project and optimize the project financing structure; on the other hand, it can integrate the technical advantages of both parties and improve the level of regional resource coordination and optimization, which is very beneficial to improving the company's refining and chemical integration operation level and regional competitiveness.
It is reported that the total investment of the second phase of the Fujian Gulei Refining and Chemical Integration Project is as high as 71.1 billion yuan. It is not only a super-large energy investment project for the joint construction of the "Belt and Road", but also an important part of the new pattern of three-dimensional energy cooperation between China and Saudi Arabia. The project plans to build more than 30 refining and chemical units such as 16 million tons/year of refining, 1.5 million tons/year of ethylene, and 2 million tons/year of aromatics, as well as supporting public works and berths. It is worth mentioning that the project mainly adopts Sinopec's independently developed technology. After completion, it will effectively guarantee the stable supply of basic raw materials such as refining, ethylene, and aromatics at the Gulei Petrochemical Base.
In December 2022, during President Xi Jinping's state visit to Saudi Arabia, Sinopec and Saudi Aramco signed a cooperation framework agreement on the second phase of the Gulei Refining and Chemical Integration Project. On November 18, 2024, the project officially started construction and is expected to be fully put into production in 2030. The establishment of the joint venture between Sinopec and Saudi Aramco's subsidiary will undoubtedly inject strong impetus into the smooth progress of the Fujian Gulei Phase II integrated project. It also indicates that China-Saudi Arabia cooperation in the energy field has reached a new height. The future progress of both sides on the project and its impact on the regional economy and energy industry structure deserve continued attention.
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