Expansions: Sabic/Fujian Energy break ground on US$6 bn petchem complex in China; Execution commences for Malaysia’s Pengerang Energy Complex

The joint venture between chemical firm Sabic and China’s Fujian Energy and Petrochemical Group Co recently held a groundbreaking ceremony to mark the start of full execution and construction phase of the Sabic Fujian Petrochemical Complex (Sino-Saudi Gulei Ethylene Complex Project) in Fujian province, China.

The Sabic Fujian Petrochemical Complex is located in Gulei Petrochemical Industrial Park, which is one of the seven national petrochemical hubs in China.  

It will be built by Sabic Fujian Petrochemicals Co, a 51:49 joint venture established in March 2022 between Sabic Industrial Investment Company (wholly owned by Sabic) and Fujian Fuhua Gulei Petrochemical Co. (holding by Fujian Energy and Petrochemical Group).

Sabic announced its final investment decision for the project in January 2024. With an estimated total investment of US$ 6.4 billion, the project marks a significant milestone in cross-regional win-win cooperation for Sabic and Fujian Energy Petrochemical.

The project is scheduled to commence the preparation for commissioning and start-up from the second half of 2026, with an expected annual ethylene capacity up to 1.8 million tonnes, to meet growing demand for high-end chemical products in the market and among customers, while stimulating downstream investment opportunities.

Sabic CEO Abdulrahman Al-Fageeh attended the event, celebrating the next chapter of the joint venture. He said, “The Sabic Fujian Petrochemical Complex is a landmark project in our development in China and testament to Sabic’s ambition to become the world’s preferred leader in chemicals. As we embark on a new chapter, we remain fully committed to providing effective solutions to our customers, maximizing shareholder value, and supporting industry upgrading. China - as one of the key major petrochemical markets globally - is also a very crucial and strategic market for Sabic. By leveraging our unique strengths, Sabic will continue to invest in China and collaborating with our local partners to contribute to the country’s high-quality sustainable development.”

In addition to the groundbreaking ceremony, the EPC (Engineering, Procurement and Construction) Contracts and a project financing loan agreement for the complex were signed as well.

In other news, Singapore-based petrochemicals, green energy and natural resources conglomerate, ChemOne Group, master developer of the Pengerang Energy Complex (PEC) has confirmed the commencement of execution for the PEC with engineering progressing well for the aromatics project in Johor, Malaysia.

Customer Review meetings for key documentation have taken place since the start of the year with the project’s technology provider and EPCC contractor, Honeywell UOP, at its HQ in Des Plaines (Chicago), US. The ultimate goal of these meetings has been to secure maximum plant efficiency, lowest energy requirements, and lowest carbon footprint.

Key agenda items discussed at these meetings include the adoption of new Honeywell UOP technologies to meet the project’s low carbon aspirations, and construction planning reviews focused on achieving fastest time to Project Start-Up, currently targeted for the end of 2027. Based on UOP’s recent technical innovations, the PEC is likely to have a 30% lower carbon footprint than UOP’s similarly installed plants.

Alwyn Bowden, CEO of Pengerang Energy Complex Sdn Bhd, said: “We are delighted to announce the commencement of execution for the PEC. Crucial meetings with our partners has seen us continue to beat industry standards when it comes to the project’s carbon intensity. We look forward to conquering further benchmarks as we finalise our lineup of top-tier contractors.”

The PEC has awarded Zeit Operation & Maintenance Co., a wholly owned subsidiary of South Korean conglomerate GS Engineering & Construction Corporation, the operations and maintenance contract for the project. 

The scope for Zeit during the Planning as well as Engineering, Procurement and Construction (EPC) phases entails assistance related to operational and training plans for PEC employees.

During the operations phase, Zeit will supervise and analyse the operations, monitor and advise on start-up and troubleshooting, as well as perform process optimisation. 

Park Seung-Bum, CEO of Zeit Operation & Maintenance Co. said: “We are delighted to collaborate with PEC and contribute to the establishment of one of the largest low-carbon aromatics production and refining facilities in the region. We eagerly anticipate the successful completion of the project.”

GS Engineering & Construction (GS E&C), the parent company of Zeit, has more than 40 years of proven track record in providing integrated EPC services, having gained extensive O&M experience working with international refining and petrochemical groups who hold world ranking status in every field of operations and maintenance excellence.

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