Saudi Arabia and China Sign Agreements on Oil

Saudi Arabia and China have signed a series of agreements during and after Chinese President Xi Jinping’s visit to the kingdom. The business agreements demonstrate deepening ties between the new nations. 

Oil giant Saudi Aramco and the Saudi Basic Industries Corp are partnering with Chinese chemical company China Petroleum and Chemical Corporation, known as Sinopec, to explore collaboration across refining and petrochemical projects in both Saudi Arabia and China. 

Saudi Aramco and Sinopec, one of the world’s largest energy and petrochemical corporations, have signed multiple agreements together. 

One project is for a greenfield project in Gulei, Fujian Province, which plans to include a 320,000 barrels-per-day refinery and a 1.5 million tons-per-year petrochemical cracker complex. It is expected to commence operations by the end of 2025.

Saudi Basic Industries Corp. has also signed a memorandum of understanding with energy giant Saudi Aramco and Sinopec. 

The companies will assess the economic and technical feasibility of developing an integrated petrochemical complex, using a refinery that already exists in Yanbu. 

The agreements come on the heels of a meeting between Saudi King Salman and Chinese President Xi. The two leaders signed a comprehensive strategic partnership agreement. 

Saudi and Chinese firms signed 34 investment agreements in green energy, information technology, cloud services, transport, logistics, medical industries, housing, and construction.

Another such agreement is an MoU between the Saudi government and Huawei for cloud data computing and building high-tech complexes in Saudi cities.

The most recent announcements between Saudi Aramco and Sinopec show the ties between Saudi Arabia and China in terms of oil. 

China is Saudi Arabia’s largest trading partner, with bilateral trade worth $87.3 billion in 2021. Chinese exports to Saudi Arabia reached $30.3 billion, while China’s imports from the kingdom totaled $57 billion.

Saudi Arabia is also China’s top oil supplier, making up 18% of Beijing’s total crude oil purchases, with imports totaling 73.54 million tonnes in the first 10 months of 2022, worth $55.5 billion.

The announcements support Saudi Aramco’s role as a reliable energy supplier to China as the company seeks to expand its liquids to chemicals capacity to up to 4 million barrels per day by 2030. 

The collaboration also aligns with Sinopec’s vision to become a world-leading energy and petrochemical corporation, providing quality products and reliable energy to benefit the lives of people worldwide.

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