Fujian Project Joint Feasibility Study Approved by Government

October 17, 2002 at 9:46 AM EDT
IRVING, Texas, Oct 17, 2002 (BUSINESS WIRE) -- Fujian Petrochemical Company Limited (FPCL, a 50:50 joint venture between Sinopec Corp. and the Fujian Province), ExxonMobil China Petroleum and Petrochemical Company Limited and Aramco Overseas Company B.V. announced today that the State Council of the People's Republic of China has approved their joint feasibility study (JFS) for the Fujian integrated petroleum/petrochemical project.

This approval will facilitate finalization of the Joint Venture Contract among the three companies. Thereafter, the contract will be submitted to the Ministry of Foreign Trade and Economic Cooperation for approval.

The Fujian project will be a joint venture among FPCL (50 percent), ExxonMobil (25 percent), and Saudi Aramco (25 percent).

Project co-venturers plan to develop a multi-billion dollar world-class refining, marketing and petrochemical complex in the Fujian Province. The existing FPCL refinery in Quangang, Fujian Province, will be expanded from its existing 80,000 barrels-per-day capacity to 240,000 barrels per day. In addition, the project involves construction of a new world-scale 800,000 tons-per-year ethylene steam cracker, and polyethylene and polypropylene units, together with chemical derivatives manufacturing units and related distribution and marketing facilities. The petrochemical complex will take feedstock from and be operationally integrated with the refinery.

Mr. Jia Xitai, vice governor of Fujian Province, said, "The State Council's approval of the JFS for the Fujian integrated petroleum/ petrochemical project is great news for the people of Fujian. The petrochemical industry is one of the pillar industries in Fujian. Its lead project is the Fujian integrated project, which will be highly competitive with its world-class scale and technology. The construction of the project will help improve the structure of the existing petrochemical industry and product mix in the province, facilitate the development of mid and downstream products and speed up the overall progress of Fujian's economy. The people of Fujian will do their best to cooperate with the partners in the project to make it a success."

Mr. Wang Jiming, president of Sinopec Corp., said, "The Fujian integrated petroleum/petrochemical project is one of the key projects for development of Sinopec Corp. during the 10th Five-Year Plan and in the next ten years. The State Council's approval of the JFS indicates that the Fujian integrated project has entered the period of substantive development. Sinopec Corp. will work closely with the project partners to accelerate the pace of the project and achieve the objective of early formation of the joint venture. We believe that we'll build a world-class project with strong competitive edge by leveraging the strengths of all the partners."

Mr. Edward G. Galante, senior vice president of Exxon Mobil Corporation, said, "We are very pleased with the concept of the proposed joint venture, which was submitted to and now endorsed by the State Council. Our experience is that an integrated refining and chemicals project will have strong synergies, and we expect that these synergies will be further enhanced by integration with a Fuels Marketing Joint Venture. This, coupled with the strength and experience of the partners, will ensure a very competitive and potentially very successful venture that will serve the markets in Fujian and China well."

Mr. Abdulaziz Al-Khayyal, senior vice president of Saudi Aramco said, "We are pleased that the State Council has now approved the project's feasibility study. We believe that the Fujian integrated project will be important to both the development of Fujian Province and to greater China. We are confident that the partners will be able to develop a successful venture and are proud that Saudi Aramco will be able to contribute to that success and afford the joint venture a stable and secure source of crude oil feedstock. We look forward to the rapid completion of remaining work related to the Marketing and Manufacturing Companies so that we can obtain our Board and shareholders approvals to form these ventures in the near future."

Sinopec Corp., ExxonMobil and Saudi Aramco will also establish a fuels marketing joint venture for the marketing of fuels products manufactured by the Fujian Integrated Petroleum and Petrochemical Joint Venture. The marketing joint venture, upon approval by the Chinese government, plans to operate 600 service stations in Fujian Province.

Polyolefin products from the chemical plant will be marketed by the partners under off-take arrangements that have been agreed among the partners. 

CONTACT:          Sinopec
                  Mr. Chen Ge, (8610) 6499 0482
                  or
                  ExxonMobil, Beijing
                  Ms. Tang Ling, (8610) 6505 4142
                  or
                  ExxonMobil, Fairfax, Va.
                  Ms. Prem Nair, 703/846-4467
                  or
                  Saudi Aramco, Hong Kong 
                  Mr. Steve Laschober, 852 2588 9350

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