Saudi Aramco signs deal with Chinese partners to build a refinery

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Saudi Aramco signs deal with Chinese partners to build a refinery

Saudi Aramco is a company owned by Bloomberg. The world's biggest energy company, has signed agreements with Chinese partners to build a state-of-the-art refining complex in the northeast region of the Asian nation.

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Aramco agreed to the deal with North Huajin Chemical and Panjin Xincheng to start construction on the refinery and petrochemical complex in Liaoning Province, Amin Nasser, Saudi company president and chief executive officer, said on Sunday at the China Development Forum in Beijing.

The high conversion of liquids directly into chemicals as part of our broader liquid-to- chemicals business expansion plan is part of the win-win opportunity, Nasser said.

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

Aramco said in a statement that construction is due to start in the second quarter and it expects the project to be fully operational by 2026. Aramco will own 30%, the Norinco Group 51% through its subsidiary North Huajin Chemical, and Panjin Xincheng 19% of the joint venture.

The refining complex will include 300,000 barrels-a- day refinery and 1.65 million tons steam cracker. Aramco will supply up to 210,000 barrels per day of crude oil feedstock for the project.

Aramco agreed in 2019 to start a venture with two Chinese partners when Crown Prince Mohammed bin Salman was in Beijing in what was seen as a landmark deal with a key ally. In 2020 the Saudis paused investment in the refinery venture due to an uncertain market outlook when Covid lockdowns in China throttled downstream demand.

Aramco said last March that it would invest in a 300,000 barrel-a-day refinery with China North Group Corp., known as Norinco, the parent company of North Huajin Chemica and a Pajin-based company.

Aramco is aiming to increase gas production by more than 50% by the year 2030, adding an extra one million barrels a day of oil for export, Nasser said.

The Saudi company is partnering with Baoshan Iron Steel Co. to produce steel plates in Saudi Arabia with a lower carbon footprint, he said. He said the company signed a letter of intent to be part of a new entity that was created by Renault SA and Zhejiang Geely Holding Group Co. in an effort to develop more efficient and less emission engines and hybrid systems.

With help from Serene Cheong and Dana Khraiche.

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