Oil major Saudi Aramco and Chinese companies have signed an agreement to develop a joint refining and petrochemical complex worth more than US$10 billion during Crown Prince Mohammed Bin Salman’s two-day trip to Beijing.
Aramco and China North Industries Corporation, officially abbreviated as Norinco, along with Panjin Sincen, agreed to create “the largest Sino-Foreign” joint venture on Friday. The new complex will be located in the city of Panjin in the Chinese Liaoning province, and is set to start commercial operation in 2024, the Saudi company said in a statement.
The partners will set up a new company called Huajin Aramco Petrochemical Co. Ltd., as part of a project that will include a 300,000-barrel-per-day refinery. Saudi Aramco will hold 35 percent of the newly formed venture, while its Chinese partners NORINCO and Panjin will hold 36 percent and 29 percent correspondingly, according to the deal.
Aramco vowed to supply up to 70 percent of the crude feedstock for the refinery.
The company also signed an agreement to buy a nine-percent stake in an 800,000-barrel-per-day integrated refinery and petrochemical complex in the Zhejiang province, it announced the same day.
The multi-billion deal comes as Saudi Crown Prince Mohammed Bin Salman (MbS) wrapped up his visit to China, Saudi Arabia’s largest trade partner, as part of his Asian tour. During his trip, the Saudi royal took a walk along the Great Wall before meeting Chinese President Xi Jinping.
Saudi Arabia has long been eyeing investment in China, including its ambitious Belt and Road Initiative (BRI). Beijing has apparently become especially attractive for Riyadh, after some of its trade partners condemned the murder of Washington Post journalist Jamal Khashoggi in the Saudi Consulate in Istanbul last year. The crown prince has denied any links to Khashoggi’s death.
Also on rt.com Russia & China to sign ‘contract of the century’ for next-generation heavy helicopterEarlier this month, Saudi Minister of Energy, Industry and Mineral Resources Khalid bin Abdulaziz Al-Falih told Xinhua news agency that “major investment” between the two countries is just starting.
“Saudi Arabia has a lot of capital that needs to find profitable places to be deployed. China is a great place to invest with a huge market and an improving environment,” the minister stated.
China is Saudi Arabia’s top trade partner. However, when it comes to crude imports, Russia has remained the leading crude oil supplier to the country for the past two years, leaving the kingdom behind.
For more stories on economy & finance visit RT's business section