We are likely headed for a strange day, the one when China passes the U.S. as the world's leading consumer of fuel. In the meantime, preparations are being made such that the Asian country has plenty of fuel and products.
Now, one of the participants in serving China's growing quest for fuel is ExxonMobil (NYSE:XOM), which recently began operation of a $4.5 billion refining and petrochemical complex in Fujian Province. But Exxon isn't going it alone. It's teamed up with China Petroleum & Chemical Corp. -- Sinopec to its friends -- Saudi Aramco, and the local provincial government.
The facility will have a refining capacity of 240,000 barrels per day, or three times the throughput capability of the older unit it replaced. In two years, when it has been completed, it'll eclipse Exxon's Baytown, Texas, unit as the company's largest manufacturing facility. In addition to its refining capacity, the unit will be able to turn out a combined 1.2 million tons annually of polyethylene and polypropylene -- from which plastics are made -- along with 700,000 tons per year of polyester building block, paraxylene.
But Exxon isn't the only giant company that has newly entered into a contract with China and Sinopec. Riyadh-based Saudi Basic Industries Corp. and the Chinese company also formed a partnership last year, called SINOPEC SABIC Tianjin Petrochemical Co., Ltd. that, at new facilities costing $2.7 billion, will be able to produce 3.2 million tons yearly of various chemical products. The complex is located at Tianjin, China, and is expected to begin production early next year.
Beyond that, other major companies are studying the possibility of moving into China. For instance BP (NYSE:BP) apparently has resumed talks with Kuwait and Sinopec regarding the construction of a refinery in Zhanjiang. Similar discussions were conducted last year, but BP appeared to become excluded when Kuwait inserted Shell (NYSE:RDS-A) and Dow Chemical (NYSE:DOW) on the project's list of possible participants. Further, Total (NYSE:TOT) has refining capacity in China, and Chevron (NYSE:CVX) recently joined up with PetroChina (NYSE:PTR) parent company CNPC to initiate a large natural gas project in China.
Interestingly enough, Exxon also plans to build no fewer than 750 service stations on mainland China -- just when it's selling its U.S. units. I have come to respect the moves made by the company's astute management and suggest that with oil and gas prices edging upward, the biggest of Big Oil warrants careful monitoring by Fools with a taste for energy.
ExxonMobil is a four-star company in the Motley Fool CAPS universe. Do you agree? Why not head for the company's CAPS page and register your thoughts?
