Saudi Aramco inks deal to form China's largest Sino-Foreign JV

State-owned oil giant Saudi Aramco signed an agreement on Friday to form a joint venture with NORINCO Group and Panjin Sincen, the company said in a statement.

The agreement was signed to develop a fully integrated refining and petrochemical complex, located in Panjin in the Liaoning province of China.

The partners will create a new company, Huajin Aramco Petrochemical Co. Ltd., as part of a project that will include 300,000 barrels per day (bpd) refinery with a 1.5 million metric tonnes per annum (mmtpa) ethylene cracker and a 1.3 mmtpa PX unit.

Saudi Aramco will supply up to 70 percent of the crude feedstock for the complex, which is expected to start operations in 2024.

“Our agreement today with NORINCO and the Liaoning province is a clear demonstration of Saudi Aramco’s strategy to move from beyond a buyer-seller relationship, to one where we can make significant investments to contribute to China’s economic growth and development,” Saudi Aramco CEO, Amin Nasser said.

“Our participation in the integrated refining and petrochemical project in Panjin will strengthen our collaborative efforts to enhance energy security, revitalize key growth sectors and industries in Liaoning and also meet rising demand for products and goods in China’s Northeast region,” he said.

There are additional plans to establish a fuel retail business, which will further integrate into the value chain, the statement added.

By the end of 2019, a three-party marketing joint venture (JV) company is expected to be formed between Saudi Aramco, North Huajin and Liaoning Transportation Construction Investment Group Co. Ltd. to develop a retail fuel stations network in the target markets.