Saudi Aramco in deal with Chinese firms to build refinery

BEIJING: Saudi Aramco and its Chinese partners are to start building a huge refining and petrochemical complex in the Asian nation, accelerating a development that was paused during the pandemic.

Aramco agreed to start construction on the complex in Liaoning province with North Huajin Chemical and Panjin Xincheng, chief executive officer Amin Nasser said at the China Development Forum in Beijing on Sunday.

In a separate statement, the Saudi company said development is due to begin in the second quarter and the project is expected to be fully operational by 2026.

Talks on what was meant to be a US$10bil (RM44bil) venture were revived early last year after Aramco decided to stop investing in the facility in 2020 due to an uncertain outlook caused by the pandemic. The venture was agreed upon in 2019 during Crown Prince Mohammed bin Salman’s visit to Beijing in what was seen as a landmark deal with a key ally.

“We see a major win-win opportunity to build a world-leading, integrated downstream sector in China, with special emphasis on the high conversion of liquids directly into chemicals as part of our broader liquid-to-chemicals business expansion plans,” Nasser said.

Aramco wants to be an all-inclusive source of energy and chemicals for China’s long-term energy security and high-quality development, he said.

The refining complex will include a 300,000 barrels-a-day refinery and a petrochemical plant with an annual production capacity of 1.65 million tonnes of ethylene and two million tonnes of paraxylene.

Aramco will supply as much as 210,000 barrels per day of crude feedstock to the project.

Aramco will own 30%, Norinco Group, the parent company of North Huajin Chemical will hold 51% and Panjin Xincheng will hold the balance. — Bloomberg

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