Saudi Aramco set to expand downstream business in China

Aramco Asia Co., a subsidiary of Saudi Aramco and PT Pertamina, plans to expand its downstream operations in the Chinese provinces of Fujian and Yunnan, as part of the company’s commitment to promote regional economic growth and ensure energy security.

The move is part of the Asian unit’s plan to enhance mutual investments between China and Saudi Arabia, in line with Saudi Vision 2030 and China’s “Belt and Road” Initiative, Saudi Aramco said in a statement on Wednesday.

“We plan to upgrade our downstream chemical business by building a chemical hub to distribute products from our operations in this region,” Aramco Asia president and chief executive Nabil A. Al-Nuaim said in the statement.

The new hub could be established in Xiamen, backed by potential benefits from China’s Free Trade Zone initiative.

Xiamen is located near Fujian Refining & Petrochemical Company Limited (FREP), a petrochemical joint venture in which Saudi Aramco owns a 25 percent stake.

The state-owned oil producer is also aiming to form a joint venture with China National Petroleum Corporation (CNPC) to own a share in the 60,000-barrel per day Anning refinery, in Yunnan province.

Commercial production of refined products is expected to commence by this summer.

When the JV is formed, Saudi Aramco will see an annual increase of 60 to 65 retail stations to fuel Yunnan’s economic development.

Economic cooperation can be expanded in many other areas such as renewable energy, agriculture, mining, and infrastructure development, Al-Nuaim added.