Saudi Arabia state-owned Aramco has inked an agreement with Chinese conglomerate Norinco to form a joint venture in order to develop a refining and petrochemical complex in China’s Panjin city, stating the project is worth more than of $10 billion.
According to Reuters news reports, Aramco has said on Friday that Norinco and Aramco, along with Panjin Sincen, will be forming a new entity called Huajin Aramco Petrochemical Co as a part of the project that will include a 300,000 barrels per day with about 1.5 million metric tonnes per year ethylene cracker.
The agreement was signed during the visit of Saudi Arabia crown prince Mohammed bin Salman to Beijing as a part of his Asia tour.
Aramco will own about 35 per cent of the new company, with Panjin Sincen and Norinco owning 29 per cent and 36 per cent respectively, the statement added.
Aramco is asked to supply up to 70 per cent of the crude oil for the complex, which was expected to begin operations nearly in 2024. Aramco said the value of this project means it is the largest Sino-Foreign joint-venture.
In a statement, Aramco CEO Amin Nasser said that the agreement “is a clear demonstration of Saudi Aramco’s strategy to move from beyond a buyer-seller relationship, to one where we can make significant investments to contribute to China’s economic growth and development”.
It said there were also plans to establish a fuel retail business. Saudi Aramco, North Huajin and Liaoning Transportation Construction Investment Group are expected to form a three-party marketing joint-venture company by the end of 2019.