Chinese and Saudi staff members of Yanbu Aramco Sinopec Refining Company exchange views at the company's factory in the western Saudi Arabian city of Yanbu, on November 27, 2022. Photo: Xinhua

Oil giant Saudi Aramco signed a deal for a major refinery and petrochemical complex with its Chinese partners over the weekend. The greenfield project will include a 300,000 barrel per day (bpd) refinery and a 1.65 million ton steam cracker, according to a company statement seen by the Global Times on Monday.

The joint venture (JV) with China's NORINCO Group and Panjin Xincheng Industrial Group is located in Panjin city in Northeast China's Liaoning Province, and it is set to be fully operational by 2026.

The complex will combine a 300,000 bpd refinery and a petrochemical plant with annual production capacity of 1.65 million tons of ethylene and 2 million tons of paraxylene.

Aramco, with a 30 percent stake in the JV, will supply up to 210,000 bpd of crude oil feedstock to the complex, with construction due to start in the second quarter of 2023.

The project cost will be 83.7 billion yuan ($12.16 billion), according to a statement on Panjin Xicheng Industrial Group's WeChat account on Sunday.

China's optimization of its domestic epidemic response has been seen as a boost to the global commodity market, with many companies placing their bets on China. Top executives from Brazilian miner Vale and Australian miner Fortescue Metals Group all attended the China Development Forum (CDF) 2023.

Speaking at the CDF on Sunday, Saudi Aramco President and CEO Amin Nasser said that his company is doubling down on China's energy supply, including new lower carbon products, chemicals and other innovations.

"We see a major win-win opportunity to build a world-leading, integrated downstream sector in China, with special emphasis on the high conversion of liquids directly into chemicals as part of our broader liquid-to-chemicals business expansion plans," he said.

The company is expanding its oil production capacity by 1 million bpd to 13 million barrels by 2027 to strengthen China's long-term energy security, noted the CEO.

Saudi Arabia was China's top supplier in 2022, having shipped a total of 87.49 million tons of crude to China, equivalent to 1.75 million bpd, per customs data.

Global Times