Plants: Saudi Aramco/Sinopec to expand Yasref petrochem complex; Maruzen Petrochemical to shut ethylene unit in Chiba

State-ownedfirm Saudi Aramco has signed a deal with China's Sinopec to expand a petrochemicals complex operated by their Yasref joint venture in Yanbu, Saudi Arabia.

Under the agreement, the parties will advance engineering studies towards a new petrochemical unit, a 1.8-million-tonnes/year mixed-feed steam cracker and a 1.5-million-tonnes/year aromatics complex with associated downstream derivatives that will be integrated into the existing Yasref complex in Yanbu, on the west coast of Saudi Arabia.

The announcement coincides with the tenth anniversary of Yanbu Aramco Sinopec Refining Company, or Yasref, which is 62.5% owned by Aramco and 37.5% by Sinopec.

Aramco and Sinopec have partnered in several ventures as Saudi Arabia looks to expand its refining business, which can help to offset drops in crude oil prices.

"The Yasref expansion project represents a significant milestone in our bilateral partnership, ushering in a new phase of deeper and more far-reaching collaboration," Sinopec President Zhao Dong said in an Aramco statement.

“Our strong relationship with Sinopec continues to build momentum. The planned Yasref expansion aligns with our downstream strategy to unlock the full potential of our resources, including converting up to 4 million bpd of crude oil into petrochemicals by 2030,” said Mohammed Y. Al Qahtani, Aramco’s president of downstream.

It already processes 400,000 barrels/day of Arabian heavy crude oil to produce transportation fuels and other refined products, according to its website.

Aramco has a long-term liquids-to-chemicals strategy to process up to 4 million barrels/day of its crude into petrochemicals by 2030.

Other ventures with Sinopec include a refinery and petrochemical complex in southeast China's Fujian province that Sinopec in November said it had started constructing with Aramco. It also holds a stake in the Fujian Refining & Petrochemical Company, which is half-owned by a Sinopec joint venture, and Aramco chemicals subsidiary Sabic has an operational joint venture with Sinopec.

In other news, Japan's Maruzen Petrochemical, a unit of Cosmo Energy Holdings will shut its ethylene unit in Chiba in the 2026/27 financial year and consolidate production at Keiyo Ethylene, its joint venture with Sumitomo Chemical, it said recently.

The move aims to enhance the utilisation rate and competitiveness of Keiyo Ethylene, which is 55% owned by Maruzen Petrochemical and 45% by Sumitomo Chemical, the three companies said in a statement.

Japanese ethylene plants have been struggling with low operating rates due to global oversupply driven by large-scale capacity expansions in China, as well as declining domestic demand.

The industry also faces increasing pressure to achieve net-zero carbon emissions through energy transportation.

Against this backdrop, Maruzen Petrochemical and Sumitomo Chemical decided to optimise their ethylene production in the Chiba area, near Tokyo, to cut costs and maintain competitiveness, they said.

Maruzen's Chiba ethylene unit, which started operations in 1969, has an annual production capacity of 525,000 tonnes. Keiyo Ethylene, launched in 1994, has a capacity of 768,000 tonnes/year.

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