The technical licensing and process package design agreement for the Zhongsha Gulei ethylene project makes use of SABIC’s patented technologies in most cases
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On August 18, the agreement regarding technical licensing and process package design for the Sino-Saudi Ghulayy ethylene project was formally signed through a digital signing method. This is another major advancement following the official signing of the joint venture contract for the Zhongsha Gulei ethylene project in August 2021, the official establishment of the joint venture company Fujian Zhongsha Petrochemical Co., Ltd. in March 2022, and the approval of the project in June. The technologies covered by this agreement are all world-leading patented technologies; most of them are SABIC’s patented technologies. The products manufactured using these technologies are of high quality, differentiated in features, and environmentally friendly, with energy efficiency, waste discharge levels, and carbon emission figures all at the international leading level for their industry. The signing of this technology licensing and process package design agreement marks another important milestone for the Sino-Saudi Ghulayyil ethylene project, laying a solid foundation for its early completion, commissioning, and realization of benefits. Relevant leaders and officials from Saudi Basic Industries Corporation, Fujian Energy and Petrochemical Group Company, Fujian Sino-Saudi Petrochemical Co., Ltd., and patent technology providers attended this signing ceremony. The Zhongsha Gulei Ethylene Project is located in the Gulei Petrochemical Complex in Zhangzhou, Fujian, one of China’s seven major petrochemical hubs. With a total investment of 42.07 billion yuan, it was established through a joint venture between Saudi Basic Industries Corporation (SABIC) and Fujian Energy Petrochemical Group in a 51%:49% shareholding ratio. The project will involve the construction of a world-class facility capable of producing 1.5 million tons of ethylene per year, along with downstream processing units; it represents the largest foreign-invested joint venture project in Fujian to date.
In Sino-foreign joint venture petrochemical projects, foreign investors usually use patents and process packages as conditions for their investment; they recover their investment costs through patent licensing fees, process package fees, and proprietary equipment. On the other hand, the Chinese side can only recover its costs through land and engineering (E&C) services. Of course. The vast majority of equipment and bulk materials are manufactured in China. This is also a condition for foreign capital to enter the Chinese market, right?
The vast majority of equipment and bulk materials are manufactured in China. This is also a condition for foreign capital to enter the Chinese market, right? This is the best condition available at present; China can provide the best organization and support
Shabik represents 51%, which means that the standards of the factory are set in accordance with Shabik’s standards; this is the key point. Recently, discussions have also taken place with domestic companies regarding joint ventures to establish factories, but it’s very difficult to reach an agreement on the principles involved.
It means that the design and construction must meet both American standards
Shabik’s standards essentially combine American and European standards, but the detailed design phase requires adaptation based on national standards.
SABIC has its own standard system, which is not based on American standards; there are many SABIC inspectors active in the country.
Why????? Is there a lot of supply from Aramco?
The petrochemical contracting market in the Middle East was initially developed by European and American companies, later replaced by those from Japan and South Korea, and now is dominated jointly by China, Japan, and South Korea. With the concentration of project markets in Saudi Arabia, these markets have gradually focused on Sabic and Aramco (similar to CNPC and Sinopec in China), and the company’s engineering design standards and project management standards have largely incorporated American and European standards, leaning towards Western practices. Scope of supply: For key long-cycle equipment, European and American manufacturers are likely to be used first; for bulk materials and ordinary equipment, domestic manufacturers are probably the ones in charge.