Aramco JV HAPCO Breaks Ground on New Refinery and Petrochemical Complex

Officials at the ground-breaking ceremony of the major integrated refinery and petrochemical complex being developed by Huajin Aramco Petrochemical Company (HAPCO).
Officials at the ground-breaking ceremony of the major integrated refinery and petrochemical complex being developed by Huajin Aramco Petrochemical Company (HAPCO).
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Aramco JV HAPCO Breaks Ground on New Refinery and Petrochemical Complex

Officials at the ground-breaking ceremony of the major integrated refinery and petrochemical complex being developed by Huajin Aramco Petrochemical Company (HAPCO).
Officials at the ground-breaking ceremony of the major integrated refinery and petrochemical complex being developed by Huajin Aramco Petrochemical Company (HAPCO).

A ground-breaking ceremony took place on Wednesday for a major integrated refinery and petrochemical complex being developed by Huajin Aramco Petrochemical Company (HAPCO).

The joint venture between Aramco (30%), NORINCO Group (51%) and Panjin Xincheng Industrial Group (19%) is developing the complex in the city of Panjin, in China’s Liaoning Province, said a statement by Aramco.

On March 26, it was announced that the complex was expected to be fully operational by 2026. Aramco is expected to supply up to 210,000 barrels per day (bpd) of crude oil feedstock to the facility.

Among those attending the ground-breaking ceremony were Abdulrahman Alharbi, Saudi Ambassador to China; Hao Peng, Secretary of the Provincial Party Committee and Chairman of the Standing Committee of the Liaoning Provincial People's Congress; Li Lecheng, Deputy Secretary of the Provincial Party Committee and Governor of the Liaoning Provincial Government; Liu Shiquan, Chairman of Norinco Group; Wang Bingsen, Secretary of the Panjin Municipal Party Committee; and Zou Wenchao, Vice President of Norinco Group.

Mohammed Al-Qahtani, Aramco Executive Vice President of Downstream, said in a speech at the event: “This complex is a cornerstone of our efforts to support a world-class, integrated Downstream sector here in China, as petrochemicals will play a vital role in our joint success.”

“Once complete, we believe HAPCO will be a model for China’s modern petrochemicals industry moving forward, able to deliver lower carbon products, chemicals, and advanced materials,” he added.

On March 27, Aramco also announced it had signed definitive agreements to acquire a 10% interest in Shenzhen-listed Rongsheng Petrochemical Co. Ltd. for RMB 24.6 billion ($3.6 billion).

Combined, the partnership with Rongsheng and the HAPCO joint venture would see Aramco supply a total of 690,000 bpd of crude to high chemical conversion assets in China, in line with its strategy of converting four million bpd of crude to chemicals by 2030.



Eight OPEC+ Alliance Members Move toward Output Hike at Meeting

FILE PHOTO: OPEC logo is seen in this illustration taken, October 8, 2023. REUTERS/Dado Ruvic/File Photo
FILE PHOTO: OPEC logo is seen in this illustration taken, October 8, 2023. REUTERS/Dado Ruvic/File Photo
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Eight OPEC+ Alliance Members Move toward Output Hike at Meeting

FILE PHOTO: OPEC logo is seen in this illustration taken, October 8, 2023. REUTERS/Dado Ruvic/File Photo
FILE PHOTO: OPEC logo is seen in this illustration taken, October 8, 2023. REUTERS/Dado Ruvic/File Photo

Saudi Arabia, Russia and six other key members of the OPEC+ alliance will discuss crude production on Saturday, with analysts expecting the latest in a series of output hikes for August.

The wider OPEC+ group -- comprising the 12-nation Organization of the Petroleum Exporting Countries (OPEC) and its allies -- began output cuts in 2022 in a bid to prop up prices.

But in a policy shift, eight alliance members surprised markets by announcing they would significantly raise production from May, sending oil prices plummeting.

Oil prices have been hovering around a low $65-$70 per barrel.

Representatives of Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman will take part in Saturday's meeting, expected to be held by video.

Analysts expect the so-called "Voluntary Eight" (V8) nations to decide on another output increase of 411,000 barrels per day (bpd) -- the same target approved for May, June and July.

The group has placed an "increased focus on regaining market shares over price stability," said Saxo Bank analyst Ole Hansen.

Enforcing quotas

The group will likely justify its decision by officially referring to "low inventories and solid demand as reasons for the faster unwind of the production cuts", UBS analyst Giovanni Staunovo told AFP.

But the failure of some OPEC member countries, such as Kazakhstan, to stick to their output quotas, is "a factor supporting the decision", he added.

According to Jorge Leon, an analyst at Rystad Energy, an output hike of 411,000 bpd will translate into "around 250,000 or 300,000" actual barrels.

An estimate by Bloomberg showed that the alliance's production increased by only 200,000 bpd in May, despite doubling the quotas.

No effect from Israel-Iran war

Analysts expect no major effect on current oil prices, as another output hike is widely anticipated.

The meeting comes after a 12-day conflict between Iran and Israel, which briefly sent prices above $80 a barrel amid concerns over a possible closing of the strategic Strait of Hormuz, a chokepoint for about one-fifth of the world's oil supply.

As fears of a wider Middle East conflict have eased, and given there "were no supply disruptions so far", the war is "unlikely to impact the decision" of the alliance, Staunovo added.

The Israel-Iran conflict "if anything supports a continued rapid production increase in the unlikely event Iran's ability to produce and export get disrupted," Hansen told AFP.