Chinese and Saudi Arabian have reportedly signed a number of multi-billion dollar agreements worth over US$10 billion. Saudi Crown Prince Mohammed bin Salman has revealed his country's plans to build a refining and petrochemical complex in China, which was agreed upon during his meet with Chinese President Xi Jinping.
The Chinese president met with the crown prince along with other delegates, most of which were top executives of the state-owned oil firm Saudi Aramco. The new US$10 billion deal comes at the heels of a US$20 billion deal Saudi had signed in Pakistan. The country is also heavily invested in increasing its involvement in India's oil refining industry.
During their meeting, President Xi Jinping reiterated China's close ties with Saudi Arabia. The president mentioned that the relationship between both their countries has included thousands of years of friendly interactions. Crown Prince Mohammed apparently shared the sentiments and mentioned that China's Silk Road initiative and its overall economic strategies do align with his country's Vision 2030 economic reform program.
According to the crown prince, the trades between both their countries have increased by 32 percent since last year and it is looking forward to more deals with China. In line with this goal, the crown prince revealed that they are even working to have Chinese added to the curriculum in his country's schools and universities.
According to local media reports, Saudi Arabia and China signed a total of 35 economic cooperation agreements during the latest visit. The agreement included a joint partnership with Chinese defense firm Norinco and Saudi's Aramco. Both companies will reportedly start a new corporation called Huajin Aramco Petrochemical Corp.
The joint venture will include the development and construction of a large refining and petrochemical complex in the city of Panjin in the Liaoning province. The complex will include a state-of-the-art ethylene cracker, a facility that converts ethane into ethylene, which is expected to produce 1.5 million metric tons of ethylene per year. The complex will also have a refinery that is expected to yield 300,000 barrels per day.
As part of the deal, Aramco will be supplying 70 percent of the oil needed for the complex, which is scheduled to be in operation by 2024. Aramco also bought a 9 percent stake in the Chinese petrochemical company, Zhejiang, which has a 400,000-bpd refinery in Zhoushan. The new agreements will help Saudi Arabia regain its position as China's top oil exporter. Aramco is also reportedly aiming to sign different supply deals with other Chinese refineries in the coming months.
