On October 10, the 100,000/1,000,000 t/y ethylene oxide/ethylene glycol (EO/EG) unit of Fujian China-Saudi Petrochemical began oxygen introduction and startup. The ethylene glycol product passed analysis and was sent to the intermediate tank farm. The trial startup succeeded on the first attempt. Previously, the project’s core 1.8 million t/y ethylene unit completed mechanical handover in June and started integrated commissioning, while three polyolefin units successively achieved successful trial startups.
The project involves a total investment of approximately RMB 44.8 billion. SABIC holds 51%, and Fujian Fuhua Gulei Petrochemical holds 49%. Its core configuration includes 1.8 million t/y ethylene, 400,000 t/y HDPE, 600,000 t/y LLDPE, 950,000 t/y polypropylene, and 290,000 t/y polycarbonate.
In 2026, China will add 7.29 million t/y of polyethylene capacity and 5.45 million t/y of polypropylene capacity, with nominal capacity growth rates of 18.5% and 11.1%, respectively. Low-cost Middle Eastern capacity is coming onstream in a concentrated wave. The Borouge 4 project is to reach full production in October, adding 1.4 million t/y of polyethylene. SABIC’s Yanbu expansion of 750,000 t/y of polyolefins started up in the third quarter. The ethane-based route costs RMB 2,000–3,000 per tonne less than the domestic oil-based route.
Amid Asia’s strong polyolefin expansion cycle, why does Fujian still dare to start up? It is betting on the import-substitution gap for China’s high-end chemical materials and on Fujian petrochemicals’ leap from a major downstream manufacturing province to an upstream materials base.
1.8 Million Tonnes of Ethylene Is Not Just About Making More Plastic Bags
The traditional logic of a large ethylene complex is to crack naphtha, produce commodity polyolefins, and profit from scale spreads. That model is becoming increasingly difficult. The Middle Eastern ethane route costs RMB 2,000–3,000 per tonne less, and even after adding sea freight, it remains price-competitive. Competition in domestic commodity-grade materials is white-hot and highly homogeneous.
In the China-Saudi Gulei 1.8 million t/y ethylene project, commodity grades account for only a portion. More importantly, ethylene serves as the feedstock foundation for import-substitution categories such as polycarbonate, metallocene polyethylene, and high-end impact-resistant polypropylene. Around the ethylene main platform, the project plans 14 downstream deep-processing units and incorporates multiple proprietary SABIC technologies. Its products target electronics and electrical, artificial intelligence, communications, healthcare, automotive, and new materials. Among them, the 100,000/1,000,000 t/y EO/EG unit is the world’s largest single-train unit of its kind.
In the future, the competitiveness of a petrochemical complex will be reflected more in how many high-value-added industrial chains can be extended from one tonne of ethylene.
Polycarbonate Is a Link That Must Be Filled
China’s high-end engineering plastics gap is larger than imagined. In addition to 950,000 t/y polypropylene, China-Saudi Gulei is simultaneously building 270,000 t/y bisphenol A and 290,000 t/y polycarbonate units, completing the full industrial chain from propylene and phenol/acetone to bisphenol A and PC.
Currently, China’s metallocene polyethylene consumption is about 600,000 tonnes, with a self-sufficiency rate of about 20%. Metallocene polypropylene consumption is nearly 100,000 tonnes, while domestic output is only 10,900 tonnes. The self-sufficiency rate of polyolefin elastomers rose from 9.2% in 2024 to 25.5% in 2025, still less than 30%. What is in oversupply among commodity materials is low-end capacity; gaps in high-end grades and specialty resins still rely on imports.
An Identity Reconstruction for Fujian Petrochemicals
Fujian’s petrochemical industry previously had an oil “head” that was not large enough and a chemical “tail” that was not strong enough. The textile, apparel, and footwear industries in Quanzhou and Putian are already trillion-yuan clusters, but chemical fiber raw materials come either from abroad or from Jiangsu, Zhejiang, and Guangdong.
China-Saudi Gulei is bridging this gap. Gulei Petrochemical Base has formed three core industrial chains, including aromatics-to-fiber and olefins-to-plastics. All PTA and MEG required by the Henghai New Materials polyester fiber project come from enterprises in Gulei Park. Freight per tonne is RMB 60–80 cheaper than purchasing from Zhejiang.
A bigger variable is the second phase of the Gulei refining and petrochemical integration project, with a total investment of RMB 71.1 billion. It plans more than 30 units, including 16 million t/y refining, 1.5 million t/y ethylene, and 2 million t/y aromatics. After completion, it will supply 5 million tonnes of core feedstock to the Gulei Petrochemical Base. Small capacity will be consolidated, inefficient units will exit, and resources will concentrate in large integrated projects. The future watershed for Fujian petrochemicals will no longer be who has a refining license, but who can connect refining, aromatics, olefins, and new materials into one system.
Fujian’s confidence to advance this RMB 44.8 billion petrochemical complex amid the polyolefin expansion wave comes from SABIC’s technology and industrial experience, the cost and feedstock synergy advantages brought by large integrated units, and the supporting demand from local industries in Fujian. Compared with simply expanding commodity-grade capacity, China-Saudi Gulei’s greater opportunity lies in extending into high-end polyolefins and engineering plastics and leveraging Gulei’s follow-up refining and petrochemical projects to improve the regional industrial chain.
