BEIJING, China - Saudi Arabia has cemented trade ties with China with the move by Saudi Aramco to enter into a $10 billion joint venture with NORINCO Group and Panjin Sincen.
The JV plans to build a fully integrated 300,000 barrel a day refinery with a 1.5 million metric tons per annum (mmtpa) ethylene cracker and a 1.3 mmtpa PX unit in the city of Panjin, in the Liaoning province of China.
As part of the deal, Saudi Aramco will provide 70% of the crude feedstock.
The refinery is expected to take 5 years to construct, and the stakeholders plan for it to be operational by 2024.
The new joint venture vehicle, Huajin Aramco Petrocemical Co. Ltd., will be structured with Saudi Aramco holding a 35% stake, Norinco 36% and and Panjin Sincen 29%.
"The agreement comes at an appropriate time; China is a pioneering economic power and is considered a huge and sustainable power consumption center. It is one of the biggest and most important international markets for Saudi Aramco, not only in petrol supply, but also as a special location for investment on refineries and chemical plants," Saudi Aramco Chief Executive Officer Amin Nasser said Friday.
"This agreement is one of the biggest foreign investments. It allows us to reach new horizons in the economic partnership with China, and it also strengthens our commercial and industrial presence and leads to seize greater opportunities for development and diversification in the refinery and petrochemical production sector."
(Pictured: Amin Nasser, president and chief executive of Saudi Aramco, centre; Jiao Kaihe, chairman of NORINCO Group, Tang Yijun, left; and the governor of Liaoning Province, during the signing ceremony in Beijing).