(Photo credit: Anadolu Agency)
Saudi oil giant Aramco announced on 27 March that it has signed an agreement with China for the building of an oil refinery and petrochemical complex in the far-eastern country’s northeast, aimed at supporting the growing Chinese demand for fuel and petrochemical products.
According to the Saudi newspaper Sabq, the total cost of the project will amount to $12.2 billion.
Construction is set to begin during the second quarter of this year, and the complex is scheduled to officially open by 2026. Currently, the project is awaiting the necessary administrative approvals.
In a statement, Aramco announced that it will be supplying 210,000 barrels of crude oil to the complex, which is being constructed in Panjin city, in China’s province of Liaoning.
“This important project will support China’s growing demand across fuel and chemical products. It also represents a major milestone in our ongoing downstream expansion strategy in China and the wider region, which is an increasingly significant driver of global petrochemical demand,” said Aramco Executive Vice President Mohammed al-Qahtani.
This project is a joint initiative between Aramco and Chinese firm NORINCO and Panjin Xinxin Industrial Group.
“This large-scale refinery and petrochemical complex are a key project … to implement and realize the joint development of the high-quality Belt and Road initiative,” said Zou Wenchao, NORINCO Group Deputy General Manager.
Just a day earlier, at the China Development Forum in Beijing on 26 March, Aramco pledged its long-term support for Chinese energy security. Aramco CEO Amin Nasser said that the Saudi oil conglomerate aims to be “an all-inclusive source of energy and chemicals for China’s long-term energy security and China’s high-quality development – to the horizon, and even beyond.”
The signing of this agreement comes as part of a significant boost in bilateral and energy cooperation between the two countries.
It also comes as part of Saudi Arabia’s recent distancing from western economic diktats.
Recently Saudi Arabia has expressed interest in joining the Brazil, Russia, India, China, and South Africa (BRICS) group of emerging economies. The BRICS group of nations represents the world’s most prominent economies outside of the western hemisphere and is a beneficial alternative to the dominant US and western-led economic system, particularly for countries under sanctions.
The kingdom has also been a large recipient of investments for China’s Belt and Road Initiative (BRI).