Saudi Aramco to Invest Billions in China's Petrochemical Industry
(MENAFN) Saudi Arabia's state-owned oil giant Aramco has announced plans to invest billions of dollars in China's downstream petrochemicals industry, including the construction of a new refinery. The investment comes as Aramco posted a record profit of over $160 billion in 2022 and Saudi Arabia has developed closer ties with Beijing in recent years.
One of the deals announced involves Aramco's acquisition of a 10% stake in China's Rongsheng Petrochemical Co. Ltd. for $3.6 billion. Under a long-term sales agreement, Aramco will supply 480,000 barrels per day to Rongsheng affiliate Zhejiang Petroleum and Chemical Co. Ltd., which operates China's largest refining and chemicals complex. Aramco's executive vice president, Mohammed Al Qahtani, called the investment a demonstration of Aramco's long-term commitment to China and its belief in the fundamentals of the Chinese petrochemicals sector. He added that the deal promises to secure a reliable supply of essential crude to one of China's most important refiners.
In another deal announced on Sunday, Aramco revealed plans to construct a new refinery and petrochemical complex in northeastern China through a joint venture. Aramco, which holds a 30% stake in the Huajin Aramco Petrochemical Company, will supply 210,000 barrels per day of crude to the complex.
Saudi Arabia has been cultivating closer ties with Russia and China in recent years. This move comes as the kingdom seeks to diversify its economy away from oil and gas, which have long been the mainstay of its economy. The closer ties with China are also a reflection of the shifting power balance in the Middle East, as Riyadh seeks to counterbalance the growing influence of Iran in the region.
Overall, these deals are a significant milestone in Saudi Arabia's efforts to deepen its economic ties with China, which has emerged as a key economic partner for the kingdom in recent years. The investments in China's petrochemical sector will help Aramco to secure a reliable supply of crude and expand its reach in the Chinese market, while also supporting China's efforts to develop its petrochemical industry.
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