Saudi Arabian Oil Co. (Saudi Aramco) has agreed to build a refinery and petrochemical plant in China costing an estimated $13 billion, deepening ties between the world’s biggest oil seller and its largest importer.
Saudi Aramco and state-owned China North Industries Group signed an agreement Tuesday for an integrated refining and chemical facility in Liaoning’s Panjin, according to a statement from China North.
The project includes a 15-million-ton-per-year (about 300,000 barrels a day, BPD) oil refinery, 1 million-ton-per-year ethylene cracker, and other chemical projects, Bloomberg reported.
The deal is part of Saudi Aramco’s strategy of investing in refining to help lock in demand for its crude and follows agreements earlier this year for stakes worth $13 billion in refining projects in Malaysia and Indonesia, Kallanish Energy learns.
An initial framework agreement for the Liaoning refinery was first signed during Saudi Arabian King Salman bin Abdulaziz’s visit to Beijing in March, according to Bloomberg.
The refinery in Panjin was first approved by Liaoning Province in 2015 and was expected to cost as much as 92.4 billion yuan ($13 billion) and take three years to develop, according to the official Liaoning Daily story at the time. The latest statement didn’t place a monetary value on the deal.