STATE-OWNED oil company Saudi Aramco signed a US$10 billion deal to build a refining and petrochemical complex in China on Friday, as Saudi Crown Prince Mohammed bin Salman wrapped up a two-day trip to Beijing.
The Saudi delegation, including top executives from Aramco, arrived on Thursday on an Asia tour that has already seen the kingdom pledge investment of US$20 billion in Pakistan and seek to make additional investments in India's refining industry.
Chinese President Xi Jinping has made stepping up China's presence in the Middle East a key foreign policy objective, despite its traditional low-key role there.
Aramco agreed to form a joint venture with Chinese defence conglomerate Norinco to develop a refining and petrochemical complex in the northeastern Chinese city of Panjin.
The partners will form a new company called Huajin Aramco Petrochemical Co as part of a project that will include a 300,000-barrels-per-day (bpd) refinery with a 1.5-million-metric-tonnes-per-year ethylene cracker, Aramco said.
Aramco will supply up to 70 per cent of the crude feedstock for the complex, which is expected to start operations in 2024.
The investments could help Saudi Arabia regain its place as the top oil exporter to China, a position Russia has held for the last three years. Saudi Aramco is set to boost market share by signing supply deals with non-state Chinese refiners. Aramco also signed an agreement to buy a 9 per cent stake in Zhejiang Petrochemical, Saudi state news agency SPA said. This formalised a previously announced plan to gain a stake in a 400,000-bpd refinery and petrochemicals complex in Zhoushan, south of Shanghai.
China sees "enormous potential" in Saudi Arabia's economy and wants more high-tech cooperation, State Councillor Wang Yi, the Chinese government's top diplomat, said on Thursday.
Meeting Saudi Foreign Minister Adel al-Jubeir, Mr Wang said the main features of their ties were respect, understanding and support for each other, China's Foreign Ministry said in a statement late on Thursday.
"All countries in the world have the right to develop, and Saudi Arabia is an emerging market country with enormous potential," the ministry paraphrased Mr Wang as saying.
China supports Saudi Arabia's efforts to diversify its economy and is willing to strengthen high-tech cooperation, Mr Wang added.
Meeting the crown prince on Friday, Chinese Vice-Premier Han Zheng said the two countries should push forward anti-terrorism, law enforcement and security cooperation and enhanced exchanges on their experiences in de-radicalisation, China's Xinhua news agency said.
China has had to step carefully in relations with Riyadh, since Beijing also has close ties with Saudi Arabia's regional foe Iran. REUTERS