Saudi Aramco to sign China refinery deal during Mohammed bin Salman’s visit, sources say
- Company expected to sign a memorandum of understanding to build a refinery and petrochemical project in partnership with China’s defence conglomerate Norinco
- Firm also set to formalise an earlier plan to take a minority stake in Zhejiang Petrochemical
Saudi Aramco plans to sign preliminary deals to invest in two oil refining and petrochemical complexes in China during Saudi Arabian Crown Prince Mohammed bin Salman’s state visit to Beijing this week, according to sources familiar with the plans.
The world’s top oil exporter would sign a memorandum of understanding (MOU) to build a refinery and petrochemical project in the northeast province of Liaoning in partnership with China’s defence conglomerate Norinco, said three sources with knowledge of the matter.
Aramco was also expected to formalise an earlier plan to take a minority stake in Zhejiang Petrochemical, controlled by private Chinese chemical group Zhejiang Rongsheng Holding Group, said two sources with knowledge of the deal.
Zhejiang Petrochemical is building a refinery and petrochemical complex in the east China province of Zhejiang.
The investments could help Saudi Arabia regain its place as the top oil exporter to China, which it has relinquished to Russia for the past three years. Saudi Aramco is poised to bolster its market share by signing supply agreements with non-state Chinese refiners.
It is not clear what new details will be in the MOU, as the two companies first announced an alliance in May 2017 during Saudi ruler King Salman’s visit to Beijing.
Under that agreement, the firms agreed to build a refinery capable of processing 300,000 barrels per day (bpd) of crude and a facility that would make 1 million tonnes per year of ethylene, a building block for petrochemicals, at an estimated cost of more than US$10 billion.
