Saudi Arabia's recent petrochemicals projects with China are an opportunity for both countries to develop an integrated downstream sector, Mohammed Al Qahtani, Saudi Aramco's SVP of downstream, said Dec. 18.
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"These projects represent an opportunity to contribute to a modern, efficient and integrated downstream sector in both China and Saudi Arabia," he said in a statement.
The kingdom and China have signed a raft of agreements to cooperate in the downstream sector, which the Gulf country identifies as critical for its future strategy in developing high value, lower-carbon products.
The interest in developing refining and chemicals hub was reiterated during Chinese President Xi Jinping's visit to Riyadh earlier this month.
During his visit, the Chinese state-run Sinopec on Dec. 9 signed a deal with Saudi Aramco to build a phase 2, 16 million mt/year (320,000 b/d) refining and petrochemical project with a 1.5 million mt/year ethylene unit in Gulei, in China's southeastern Fujian province.
Aramco also signed an agreement with Chinese company Shandong Energy to explore integrated refining and petrochemicals opportunities in China, the companies said in a statement Dec. 9, along the sidelines of the state visit.
Aramco will also explore a potential crude supply agreement and chemicals offtake agreement, which will see Aramco building a downstream hub in the eastern Shandong province.
Saudi Arabia is China's top crude supplier with most of the country's refineries designed to crack Middle East crudes.
The producer delivered 1.76 million b/d of crude to China in January-August this year, lifting its market share in the world's biggest crude importer to 17.7% from 16.9% a year earlier, despite the volume edging down 0.3% year on year, according to Chinese customs data.
China is central to Aramco's strategy to diversify into more specialized high-value chemical products and less-carbon intensive hydrocarbon usage, under which it has said it plans to convert up to 4 million b/d of crude oil to chemicals.
Aramco has an interest in China's downstream sector as it looks to lock in demand for its crude in Asia's largest economy and it decided in March to move forward with a 300,000 b/d oil refinery and petrochemical project in northeast China.
Aramco said it had taken the final investment decision to develop a liquids-to-chemicals complex under a joint venture with North Huajin Chemical Industries Group Corp. and Panjin Xincheng Industrial Group. Aramco had withdrawn from the project in 2020 but in September 2021 the partners revived negotiations.
The facility, to be built in the city of Panjin, will combine a 300,000 b/d refinery and an ethylene-based steam cracker, with Aramco supplying up to 210,000 b/d of crude oil feedstock. It is expected to be operational in 2024 and will cost some $10 billion.