(EnergyAsia, July 23, Wednesday) — SABIC Shenzhen Trading Company Ltd, a SABIC subsidiary in China, said it has agreed to market Saudi Aramco Sino Company Ltd’s 25% share of polyolefin products produced by the Fujian Refining and Petrochemicals Company of China. Saudi Aramco Sino Company is a wholly owned subsidiary of Saudi Aramco.

Khalid G. Buainain, Saudi Aramco’s senior vice president for refining, marketing and international operations, said marketing studies, conducted by Sino Saudi Aramco Company, revealed that the distribution and marketing of the polyolefins production of Fujian Refining and Petrochemicals Company would cover a large base of customers inside China.

The two parties agreed that this task should be undertaken by SABIC through a polyolefins marketing agreement, on account of SABIC’s local and foreign experience in petrochemical marketing.

“This agreement will underscore the depth of the cooperation between Saudi Aramco and SABIC to maximise the benefit of their investment projects in the best interest of the Saudi economy. 

Saudi Aramco’s share in the products to be marketed by SABIC will amount to 320,000 tons annually, representing 25% of the total production of the joint venture in China. Implementation of the agreement is expected to start with the commercial startup of the project in the second quarter of next year.

This agreement is considered a vital development in the partnership between SABIC and Saudi Aramco, and is expected to boost SABIC’s leading position in the field of worldwide production and marketing of polyolefins.

Saudi Aramco president and CEO Abdallah S. Jum’ah said: “Last year, we celebrated with Sinopec, the government of China’s Fujian district and ExxonMobil, the official inauguration of our Fujian Refining and Petrochemicals Company Ltd. The company is considered to be the first ever refining and petrochemical industries integrated project to be established with a foreign company in China, and here we are today ready to harvest the fruit of this new investment with our partners, through this momentous step we are taking together with SABIC.

“This agreement constitutes an extra advantage for SABIC, which grants it the right to market polyolefins in support of Saudi investments abroad. We believe this cooperation between Saudi Aramco and SABIC will add value to the Kingdom’s investments.”

SABIC vice-chairman and CEO Mohamed Al-Mady said: “The agreement is a leap in the history of Saudi industrial development. The agreement incarnates the integration between two giants each occupying a pioneering position worldwide, the first in the field of oil industries and the other in the area of the petrochemical industry.”

“I look forward to this agreement to serve as a launching pad for more extensive strategic cooperation between the two companies. SABIC has anchored its success over the years on its close cooperation with Saudi Aramco. We are looking forward to promoting this cooperation to include various industrial, marketing and technological aspects in a way that will accelerate national industrial development and maximise the gross domestic product.”

Saudi Aramco holds a 25% interest in the refining and petrochemical joint venture along with Fujian Petrochemicals, through its representative, Saudi Aramco Sino Company Ltd.   Sinopec Corporation and the Fujian Government own a 50% stake, while ExxonMobil holds a 25% interest in the joint venture.

The project’s products will include such polyolefins as linear low density polyethylene (LLDPE), at a production capability of 400,000 tons annually, high density polyethylene (HDPE), at a production capacity of 400,000 tons annually. The project will also produce polypropylene (PP), at a production capacity of 470,000 tons annually.

Headquartered in Riyadh, Saudi Arabia, SABIC was founded in 1976 when the government decided to use the hydrocarbon gases associated with its oil production as the principal feedstock for production of chemicals, polymers and fertilisers.

Saudi Aramco is one of the largest oil companies in the world and is 100% owned by the government of Saudi Arabia.