Saudi Arabia and China sign $28 billion worth of economic agreements
Saudi Crown Prince Mohammed bin Salman cemented a $10b deal for a refining and petrochemical complex in China
Saudi Crown Prince Mohammed bin Salman cemented a $10 billion deal for a refining and petrochemical complex in China on Friday, meeting Chinese President Xi Jinping.
The Saudi delegation, including top executives from state-owned oil company Saudi Aramco, arrived on Thursday on an Asia tour that has already seen the kingdom pledge investment of $20 billion in Pakistan and seek to make additional investments in India's refining industry.
Saudi Arabia signed 35 economic cooperation agreements with China worth a total of $28 billion at a joint investment forum during the visit, Saudi state news agency SPA said.
"China is a good friend and partner to Saudi Arabia," President Xi Jinping told the crown prince in front of reporters.
"The special nature of our bilateral relationship reflects the efforts you have made," added Xi, who has made stepping up China's presence in the Middle East a key foreign policy objective, despite its traditional low-key role there.
The crown prince said Saudi Arabia's relations with China dated back "a very long time in the past".
"In the hundreds, even thousands, of years, the interactions between the sides have been friendly. Over such a long period of exchanges with China, we have never experienced any problems with China," he said.
Crown Prince Mohammed said Saudi Arabia saw great opportunities with China.
"The Silk Road initiative and China's strategic orientation are very much in line with the kingdom's Vision 2030," he said according to SPA, referring to Saudi Arabia's sweeping economic reform programme.
Trade between the countries increased by 32 per cent last year, he said.
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, saying the project was worth more than $10 billion.
The partners would form a company called Huajin Aramco Petrochemical Co as part of a project that would 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. - Reuters
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