Saudi Aramco’s newest joint venture refinery in China has received its first cargo of Arab crude as it prepares for start-up, the Saudi oil giant said in a statement to Bloomberg on Wednesday, without providing a timeline for the start of commercial operations.
Saudi Arabia and its state-owned oil giant early this decade embarked on a strategy to set up joint ventures with local Chinese partners to build refineries that would process Arab crude grades, to secure deliveries in China in the long term.
The Huajin Aramco Petrochemical Company (HAPCO) joint venture was created in May 2023, with Saudi Aramco holding 30% and China’s NORINCO Group and Panjin Xincheng Industrial Group owning 51% and 19%, respectively.
HAPCO built a refinery with the capacity to process 300,000 barrels per day (bpd) of crude oil and an adjacent petrochemical plant with annual production capacity of 1.65 million metric tons of ethylene and 2 million metric tons of paraxylene.
Under the terms of the deal, Saudi Aramco would supply up to 210,000 bpd of crude oil feedstock to the project.
Back in 2023, the refinery was expected to be operational in 2026, but the timeline has slightly shifted amid the Middle East crisis that has disrupted Saudi crude deliveries in the past seven and a half months.
The HAPCO refinery in Panjin City in northeast China is now expected to begin commercial operations in the first quarter of 2027.
Following the closure of the Strait of Hormuz, Saudi Arabia has boosted its crude oil exports from Yanbu, thanks to the East-West onshore pipeline to pump oil from the huge fields in the eastern part of the country to the Red Sea port.
By Tsvetana Paraskova for Oilprice.com
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