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    SABIC, a major global player in diversified chemicals, is proceeding with a final investment decision (FID) for the SABIC Fujian Petrochemical Complex (Sino-Saudi Gulei Ethylene Complex Project) in China’s Fujian province. The decision underscores the deepening energy ties between China and Saudi Arabia.

    The petrochemical complex, a 51:49 joint venture between SABIC Industrial Investment Company (a wholly-owned subsidiary of SABIC) and Fujian Fuhua Gulei Petrochemical Co., Ltd. (held by Fujian Energy and Petrochemical Group), is slated to be constructed in Fujian’s Gulei Industrial Park. With an estimated total investment of USD 6.4 billion, it
    represents the largest foreign investment in Fujian to date and a significant addition to SABIC’s investment portfolio in China.

    The complex will feature a mixed feed steam cracker with an expected annual ethylene capacity of up to 1.8 million tonnes, alongside a suite of world-class downstream facilities including ethylene glycol, polyethylene, polypropylene, polycarbonate, and other units. Construction of the project is scheduled for completion in 2026.

    The project will support SABIC’s goal of diversifying its feedstock sources and establishing a petrochemical manufacturing presence in Asia for a wide range of products. The facility will leverage nine of SABIC’s leading technologies to meet evolving market demands for high-end chemical products in sectors such as electrical and electronics, artificial intelligence, smartphones, telecommunications, healthcare, automobiles, and advanced materials.

    The FID represents a significant milestone in SABIC’s joint ventures, following the commencement of commercial operations for a new polycarbonate plant at the Sinopec SABIC Tianjin Petrochemical Co. Ltd. (SSTPC) joint venture in 2023. The Saudi company intends to capitalise on the progress made through these joint ventures, leveraging its technology and innovation to deliver market-facing products, while contributing to the economic development of the petrochemical industry.


    The Gulf region saw chemical production reached an estimated 159 million tonnes in 2021, marking a 2% increase in production capacity compared to the previous year, according to the Gulf Petrochemicals & Chemicals Association’s (GPCA) latest report. The industry contributes 5% to regional GDP, according to the association.

    However, the GCC experienced a 2.8% decline in total oil sector activities in 2023, which was attributed to sequential oil production cuts by OPEC+. Given OPEC+'s substantial global share, accounting for roughly 40% of total global crude oil production, reduced output led to higher oil prices, particularly noticeable between the third and fourth quarters of 2023.

    “As crude oil and its derivatives serve as feedstocks for petrochemicals, the marginal increase in prices in 2024 could impact the production, investment, and financial decisions of chemical producers,” according to GPCA. “However, for GCC specific producers, a rebound in chemical demand in Asian markets (4.2% in China and 6.3% in India), and the announcement of the loosening of OPEC+ oil production quotas show promise for the growth of the regional chemical industry in 2024.”

    Growth is driven by sustainability, which has emerged as a key trend in the sector.

    “The changing regional dynamics in the olefins and polyolefins industry, particularly highlighted by China’s… expansion of petrochemical projects in 2023, are closely linked to sustainability and economic diversification projects in the GCC,” GPCA noted.



    The Gulf region’s petrochemical industry is responding to demand for “green chemicals” or chemicals primarily produced via sustainable processes, such as green ammonia or hydrogen. This can increase regional producers’ market competitiveness in the coming year.

    The Asia-Pacific region makes up around 40% of the demand for global green chemicals, which the GCC industry can leverage, particularly fertilisers, where the industry exhibits a defensive stronghold.

    In addition, the implementation of Europe’s Carbon Border Adjustment Mechanism (CBAM) by mid-2025 may impact GCC chemical producers’ exports that are not sustainably produced.

    “GCC chemical producers and governments are embracing economic diversification projects, particularly those involving CCUS (carbon capture, utilisation and storage),” GPCA noted. “This is advantageous as changing regulations under CBAM may lead to products produced via CCUS practices being exempt from carbon tax.

    Artificial intelligence (AI) is also playing a part with major producers, such as SABIC, Aramco, and UAE’s Adnoc, among others, paving the way for AI programmes to accelerate research and development for sustainable products.

    The GCC’s efforts to adapt to changing global conditions, as well as the development of sustainable projects, digital practices, and the fostering of international collaboration via trade agreements are opening new opportunities for the chemical industry.



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