Aramco, Partners to Construct Major Refinery, Petrochemical Complex in China

Officials sign an agreement to kick off construction of an integrated refinery and petrochemical complex in northeast China. (Aramco)
Officials sign an agreement to kick off construction of an integrated refinery and petrochemical complex in northeast China. (Aramco)
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Aramco, Partners to Construct Major Refinery, Petrochemical Complex in China

Officials sign an agreement to kick off construction of an integrated refinery and petrochemical complex in northeast China. (Aramco)
Officials sign an agreement to kick off construction of an integrated refinery and petrochemical complex in northeast China. (Aramco)

Aramco and joint venture partners NORINCO Group and Panjin Xincheng Industrial Group plan to start constructing a major integrated refinery and petrochemical complex in northeast China.

Huajin Aramco Petrochemical Company (HAPCO) is a joint venture between Aramco, NORINCO Group, and Panjin Xincheng Industrial Group.

It is developing a complex that would combine a refinery that produces 300,000 barrels per day and a petrochemical plant with an annual production capacity of 1.65 million metric tons of ethylene and 2 million metric tons of paraxylene.

Construction will 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 bpd of crude oil feedstock to the complex, built in Panjin, in China’s Liaoning province.

Aramco Executive Vice President of Downstream Mohammed al-Qahtani said it was an important project to support China’s growing demand for fuel and chemical products.

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

NORINCO Group Deputy General Manager Zou Wenchao said a large-scale refinery and petrochemical complex is a crucial project of NORINCO Group to implement and realize the joint development of the high-quality Belt and Road initiative, promote industrial restructuring, and enhance the oil and petrochemical sector to become stronger, better, and larger.

He noted that it would be necessary to deepen economic and trade cooperation between China and Saudi Arabia and achieve joint development and prosperity.

Panjin Xincheng Chairman of the Board Jia Fei indicated that the project is significant for Panjin to promote increasing chemicals and specialty products, strengthening the integration of the refining and chemical industry.

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

Meanwhile, Aramco CEO Amin Nasser stressed that China’s long-term energy security and high-quality development were among the company’s highest priorities.

Speaking at the China Development Forum 2023, Nasser said expanding Aramco’s oil production capacity by a million to 13 million barrels per day by 2027 will strengthen China’s long-term energy security.

He also noted that increasing gas production by more than fifty percent by 2030 should release an additional million barrels of oil daily for export.

The official said the global energy transition desperately needs realism and clarity, adding: “We welcome the pragmatic thoughts of Chinese President Xi Jinping on this.”

Aramco is already working on three major strategies to support China’s energy and development priorities.

The company recently launched a $1.5 billion venture capital sustainability fund to invest in advanced technologies to help all move closer to a net-zero emissions future.

“We are also evaluating an entry into liquified natural gas,” Nasser announced.

He highlighted the excellent example of the multiple and desirable opportunities for Chinese companies in the Kingdom in various energy and non-energy areas.

“More broadly, we are developing advanced, more sustainable materials such as those based on polymers and carbon to complement conventional ones while reducing their high cost,” he remarked.



Gold Gains on Softer Oil; US Inflation Data in Focus

A view of smelted gold bars at a smelting facility in Accra, Ghana, August 22, 2024. REUTERS/Francis Kokoroko/
A view of smelted gold bars at a smelting facility in Accra, Ghana, August 22, 2024. REUTERS/Francis Kokoroko/
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Gold Gains on Softer Oil; US Inflation Data in Focus

A view of smelted gold bars at a smelting facility in Accra, Ghana, August 22, 2024. REUTERS/Francis Kokoroko/
A view of smelted gold bars at a smelting facility in Accra, Ghana, August 22, 2024. REUTERS/Francis Kokoroko/

Gold prices rose on Friday, but were headed for a weekly loss, as oil slipped from multi-month highs and assuaged some inflationary concerns, as investors awaited key US economic data for clues on the Federal Reserve's monetary policy path.

Spot gold rose 0.6% to $4,339.46 per ounce by 1105 GMT. It was down nearly 3% for the week so far.

Prices fell on Thursday after the US Producer Price Index data showed prices increased in line with expectations in August amid a rebound in the cost of energy products.

US gold futures dropped 0.6% to $4,381.30.

The precious metal is benefiting from "softer oil prices on hopes a Monday meeting between GCC ministers and Iran can yield some results regarding the passage of oil through the Strait," said Ole Hansen, head of commodity strategy at Saxo Bank. "In addition, buyers once again emerged ahead of a key support area around $4,300," said Hansen.

Oil prices were set to end the week above $100 a barrel.

Higher oil prices stoke inflation fears and bolster expectations of the Fed raising interest rates. While gold is typically seen as an inflation hedge, higher interest rates diminish the appeal of non-yielding bullion.

Traders are now pricing in a 67% chance of a rate hike at the central bank's policy meeting next week, up from 62% before the data, according to the CME FedWatch Tool. The US consumer price inflation report is due at 1230 GMT.

Elsewhere, gold demand in India was subdued this week as volatile prices discouraged buyers, while investment demand remained strong in top consumer China.

Among other metals, spot silver rose 0.4% to $63.80 per ounce, but was down 3% for the week.

Platinum climbed 0.9% to $1,792.07 and palladium gained 2.4% to $1,312.90. However, both metals were on track for a weekly loss.


France Lowers Growth Forecast, Will Miss Deficit Target

French Minister for Economy, Finance, and Industrial, Energy and Digital Sovereignty Roland Lescure gestures as he speaks during a press conference to update the governments growth and fiscal deficit forecasts for the 2027 budget, at the Bercy Economy and Finance Ministry in Paris, France, September 11, 2026. REUTERS/Stephanie Lecocq
French Minister for Economy, Finance, and Industrial, Energy and Digital Sovereignty Roland Lescure gestures as he speaks during a press conference to update the governments growth and fiscal deficit forecasts for the 2027 budget, at the Bercy Economy and Finance Ministry in Paris, France, September 11, 2026. REUTERS/Stephanie Lecocq
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France Lowers Growth Forecast, Will Miss Deficit Target

French Minister for Economy, Finance, and Industrial, Energy and Digital Sovereignty Roland Lescure gestures as he speaks during a press conference to update the governments growth and fiscal deficit forecasts for the 2027 budget, at the Bercy Economy and Finance Ministry in Paris, France, September 11, 2026. REUTERS/Stephanie Lecocq
French Minister for Economy, Finance, and Industrial, Energy and Digital Sovereignty Roland Lescure gestures as he speaks during a press conference to update the governments growth and fiscal deficit forecasts for the 2027 budget, at the Bercy Economy and Finance Ministry in Paris, France, September 11, 2026. REUTERS/Stephanie Lecocq

France's economy will grow less than expected this year and the government will miss its budget deficit target, Finance Minister Roland Lescure said on Friday.

The downgraded outlook complicates the government's task of getting its 2027 budget passed in the coming months in a deeply divided parliament, where parties have hardened their positions before an April-May two-round presidential election.

Lescure told journalists he was lowering the government's 2026 economic growth forecast to 0.5% from 0.7% previously, but stuck with a ⁠projection of 1.0% ⁠for next year.

"This year has been marked by extreme crises involving four different types of shocks," Lescure told reporters, according to Reuters.

Slower growth will make it more difficult for the government to trim its fiscal budget deficit as planned to 5.0% of economic output this year.

"The ⁠reality is that the budget was built on a 5% assumption. And the reality is that, today, 5% is no longer an option," Lescure said.

The minister did not give a new deficit target.

The economic fallout from the war in the Middle East and summer heatwaves and drought that hit agriculture output have dragged down growth and put the government's fiscal targets out of reach.

"I think it is reasonable to say that economic ⁠uncertainty has ⁠never been greater than it is today," Lescure said. "We are operating under tight budgetary constraints; there is no more fat to trim."

Further complicating the picture, French borrowing rates have surged in recent weeks as investors have identified France as one of the weaker links in a global bond selloff due to its weak public finances and serial slippage on its deficit-reduction plans.

Lescure stressed that France had no difficulties in issuing debt, but acknowledged that it now cost more.


ECB Policymakers Open Door to More Rate Hikes on Energy Risk

The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo
The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo
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ECB Policymakers Open Door to More Rate Hikes on Energy Risk

The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo
The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo

Two European Central Bank policymakers opened the door on Friday to further interest rate increases if a war-fueled rise in energy prices continues and pushes up other prices in the euro zone.

The ECB raised borrowing costs on Thursday for the second time this year and sources told Reuters policymakers expect further policy tightening in the months ahead, with a move possible as early ⁠as October.

The central ⁠bankers of Germany and Estonia acknowledged this prospect on Friday although they both stressed any move would depend on how oil and gas prices develop.

Bundesbank President Joachim Nagel said the ECB might need to raise rates to a level that mildly curbs the economy.

"I will not exclude that we have to ⁠go into the mild restrictive territory, but as I said, it's very much dependent on how the energy prices evolve, how the price picture is evolving over the course of maybe the next month," he told CNBC in an interview, according to Reuters.

The euro zone central bank increased its key rate from 2.25% to 2.50%, bringing it to the upper end of its estimated neutral range, which neither stimulates nor slows down the economy.

Money markets have started pricing in at least another three ECB rate hikes over the next ⁠year.

Ülo Kaasik, ⁠Estonia's central bank governor, said such expectations were "understandable" given the latest increase in fuel prices and the risk that food would also become more expensive.

"Recent developments in energy markets, for example, indicate the possibility that the price increase for gas and fuels will be much larger and last longer than expected in the forecast," he said in a blog post.

Slovenia's central bank governor Primož Dolenc also warned in a blog post about "rising energy and electricity costs in the autumn and winter months".

The ECB on Thursday slightly increased its projections for growth and inflation but these did not capture the latest energy price moves.