Saudi Aramco to sign China refinery deals during crown prince visit - sources
SINGAPORE/DUBAI/BEIJING, Feb 21 (Reuters) - Saudi Aramco
plans to sign preliminary deals to invest in two oil refining
and petrochemical complexes in China during Saudi Arabian Crown
Prince Mohammed bin Salman's state visit to Beijing this week,
according to sources familiar with the plans.
Saudi Aramco, the world's top oil exporter, will sign a
memorandum of understanding (MOU) to build a refinery and
petrochemical project in the northeastern Chinese province of
Liaoning in a joint venture with China's defence conglomerate
Norinco, said three sources with knowledge of the matter.
Aramco is also expected to formalise an earlier plan to take
a minority stake in Zhejiang Petrochemical, controlled by
private Chinese chemical group Zhejiang Rongsheng Holding Group
, said two sources with knowledge of this particular
deal. Zhejiang Petrochemical is building a refinery and
petrochemical complex in eastern Chinese province of Zhejiang.
The investments could help Saudi Arabia regain its place as
the top oil exporter to China, which it has relinquished to
Russia for the past three years. Saudi Aramco is poised to
bolster its market share by signing supply agreements with
non-state Chinese refiners.
It is not clear what new details will be in the MOU with
Norinco expected during the visit, as the two companies first
announced an alliance in May 2017 during Saudi ruler King
Salman's visit to Beijing.
Under that earlier MOU, the companies agreed to build a
refinery capable of processing 300,000 barrels per day of crude
and a facility that would make 1 million tonnes per year of
ethylene, a building block for petrochemicals, at an estimated
cost of over $10 billion.
A senior Aramco executive said last June he expected the
front-end engineering for the Norinco project to be finished by
mid-2019, following which the company will take a final
Norinco public affairs officials were not immediately
available for a comment.
Aramco officials did not reply to a request for comment sent
Meanwhile, the Zhejiang agreement would give Saudi Aramco
control of the 9 percent stake in the project held by the
Zhejiang provincial government.
The agreement follows an earlier MOU that Aramco signed in
October to invest in Zhejiang's project, which is planned as a
refinery to process 400,000 bpd of crude and associated
petrochemical facilities in the city of Zhoushan, south of
Reuters was not able to immediately reach Zhoushan Ocean
Development and Investment Co Ltd, which holds the 9 percent
stake in Zhejiang Petrochemical for the provincial government,
for a comment.
The Saudi delegation, including top executives from Aramco,
arrived in Beijing on Thursday for a two-day visit, part of the
crown prince's Asia tour, during which the kingdom has pledged
$20 billion of investment in Pakistan and sought additional
investment in India's refining industry.
(Reporting by Chen Aizhu in SINGAPORE, Rania El Gamal in DUBAI
and Meng Meng in BEIJING; editing by Christian Schmollinger)
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