Saudi Aramco has signed deals that pave the way for the construction of an integrated refining and petrochemicals complex in northeast China, according to a statement released by the company.

Aramco and joint-venture partners Norinco Group and Panjin Xincheng Industrial Group plan to develop the facility, which will include a refinery with the capacity to produce 300,000 barrels a day (b/d) of oil, as well as a steam cracker with the capacity to produce 1.65 million metric tonnes a year (t/y) of ethylene and 2 million t/y of paraxylene.

They are developing the facility as the Huajin Aramco Petrochemical Company (Hapco), a joint venture in which Aramco holds a 30 per cent stake, Norinco Group has 51 per cent and Panjin Xincheng Industrial Group holds 19 per cent.

Construction is due to start in the second quarter of 2023 after the project secures the required administrative approvals. It is expected to be fully operational by 2026.

Aramco will supply up to 210,000 b/d of crude oil feedstock to the complex, which is being built in the city of Panjin in China’s Liaoning province.

Mohammed al-Qahtani, Aramco’s executive vice-president of downstream, said: “This important project will support China’s growing demand across fuel and chemical products.

“It also represents a major milestone in our ongoing downstream expansion strategy in China and the wider region, which is an increasingly significant driver of global petrochemical demand.”

Jia Fei, chairman of Panjin Xincheng, said: “The project is of great significance for Panjin to promote increasing chemicals and specialty products, strengthening integration of the refining and chemical industry.

“It is a symbolic project for Panjin as it seeks to accelerate the development of an important national petrochemical and fine chemical industry base.”

Over recent years, Aramco has become increasingly invested in expanding its petrochemical portfolio.

The company’s majority acquisition of Saudi Basic Industries Corporation (Sabic) in June 2020 marked the formal integration of the kingdom’s oil and gas and petrochemical industries.

Just a month after completing the $69.1bn transaction with the Public Investment Fund to acquire a 70 per cent stake in Sabic, Aramco announced a reorganisation of its downstream business to create four dedicated commercial units: fuels (including refining, trading, retail and lubricants); chemicals; power; and pipelines, distribution and terminals.

Since the majority acquisition of Sabic, Aramco has sanctioned significant capex allocation to increasing petrochemicals production and broadening its products portfolio.