Saudi Arabia strikes $10bn China deal

February 22, 2019

Saudi Gazette Report

BEIJING — Crown Prince Muhammad Bin Salman, deputy premier and minister of defense cemented a $10 billion deal for a refining and petrochemical complex in China on Friday, meeting Chinese President Xi Jinping.

The Saudi delegation, including top executives from Saudi Aramco, arrived on Thursday on an Asia tour that has already seen the Kingdom pledge investment in Pakistan and seeks to make additional investments in India's refining industry.

In a meeting between the Crown Prince and President Xi Jinping, Chinese president said, "China is a good friend and partner to Saudi Arabia."

"The special nature of our bilateral relationship reflects the efforts you have made," added Xi, who has made stepping up China's presence in the Middle East a key foreign policy objective, despite its traditional low-key role there.

The Crown Prince said Saudi Arabia's relations with China dated back "a very long time in the past".

"In the hundreds, even thousands, of years, the interactions between the sides have been friendly. Over such a long period of exchanges with China, we have never experienced any problems with China," he said.

The Crown Prince chaired the Saudi side in the third session of the Saudi Arabia-China High-Level Joint Committee while Vice Premier of State Council of People's Republic of China Han Zheng chaired the Chinese side.

The two sides also discussed cooperation between the two countries and coordination in political and security, trade, investment, energy, culture and technology fields.

The Crown Prince and Vice-Premier of China signed the minutes of the third session of the Saudi-Chinese High Joint Committee.

Among the deals signed, Aramco agreed to form a joint venture with Chinese defense conglomerate Norinco to develop a refining and petrochemical complex in the northeastern Chinese city of Panjin, saying the project was worth more than $10 billion.

The partners would form a company called Huajin Aramco Petrochemical Co. as part of a project that would include a 300,000-barrels per day (bpd) refinery with a 1.5-million-metric ton per year ethylene cracker, Aramco said.

Aramco will supply up to 70 percent of the crude feedstock for the complex, which is expected to start operations in 2024.

The investments could help Saudi Arabia regain its place as the top oil exporter to China, a position Russia has held for the last three years. Saudi Aramco is set to boost market share by signing supply deals with non-state Chinese refiners.

Aramco also signed an agreement to buy a 9 percent stake in Ji Jiang Petrochemicals Project, SPA said. This formalized a previously announced plan to gain a stake in a 400,000-bpd refinery and petrochemicals complex in Zhoushan, south of Shanghai.

China sees "enormous potential" in Saudi Arabia's economy and wants more high-tech cooperation, State Councilor Wang Yi, the Chinese government's top diplomat, said on Thursday.

According to SPA, several agreements and memorandums of understanding (MoUs) on investment projects and bilateral cooperation were signed between Saudi Arabia and China. They include those on cooperation in maritime transport, on the priority projects for cooperation in production capacity and investment (Group II), formation of the Trade Facilitation Task Force, agreement on Saudi Development Fund financing the construction and equipping of three hospitals in the city of Yanbian, Jilin Province.

In addition there were agreement for a loan from Saudi Development Fund for the reconstruction and rehabilitation of the earthquake-affected areas in Sichuan Province, on cooperation in the fight against cybercrime, investment in renewable energy, cooperation in countering terror, cooperation in the field of intellectual property rights, on participation in investment in a group of renewable energy projects, cooperation agreement with Saudi Aramco. — With input from agencies

February 22, 2019
3 hours ago

TGA approves taxi driver uniform and passenger transport apps

3 hours ago

Al-Jalajel praises Kingdom's contributions to support public health worldwide

5 hours ago

King Salman Park Foundation board launches the Royal Arts Complex project