Saudi Arabia and China’s state-owned firms Saudi Aramco and China North Industries Group Corp (Norinco) signed a deal for an integrated refining and chemical facility in northeast China, as the former implements it refinery investment strategy to secure demand for its crude oil.
The project includes a 15 million tons-a-year (about 300,000 barrels a day) oil refinery, 1 million tons-a-year ethylene cracker, and other chemical projects, according to a statement from Norinco.
Norinco, the state defence giant that also runs oil and gas businesses, won regulatory approval in 2015 to build the refinery and petrochemicals complex in Panjin, Liaoning province.
The planned projects -- including a 300,000 barrels per day refinery and an ethylene complex with annual capacity of 1 million tonnes -- are to be built at an estimated cost of 69.5 billion yuan ($10.09 billion), according to earlier media reports.
“Norinco and the government of Liaoning province are amongst the best partners to be in this project considering the great value proposition they are bringing to the table,” Abdulaziz M. Al-Judaimi, senior vice president, downstream at Saudi Aramco said in a separate statement.
The framework pact, which follows a memorandum of understanding in March, marks one of the high-profile agreements signed during China's Belt and Road Forum, the first summit under President Xi Jinping's ambitious plan to promote global trade and investment.
The investment would boost Aramco's presence in China's massive refining industry, adding to its 25 percent stake in the Fujian refinery in southeast China operated by state refiner Sinopec Corp.
Earlier this year, it signed agreements for stakes worth $13 billion in refining projects in Malaysia and Indonesia.
It would also allow Norinco to invest in Saudi Arabian industries, including railways, power, mining, telecommunications and oil exploration.