Saudi Aramco, Saudi Arabia’s state oil company, is rebooting an effort to ingrain itself further in China’s energy market by resuming a $10 billion refining and petrochemicals joint venture that was halted around two years ago, reports Caixin. Saudi Aramco has announced the decision to take part in the refining complex in Panjin, in China’s northeastern Liaoning province. The project, with a 300,000-barrels-a-day refinery, an ethylene cracker and a paraxylene unit, is set to start operation in 2024.
The Panjin project was inked when Crown Prince Mohammed bin Salman visited Beijing in 2019. It was seen as a landmark deal for Saudi Arabia to seek greater market share in Asia while enhancing economic ties with China. But the project went on ice early in 2020 when Aramco decided to stop investing in the facility as crashing oil prices and the pandemic’s impact on energy demand squeezed Aramco’s profit.
A joint venture, Huajin Aramco Petrochemical, was established to develop the project. China’s state-owned defense company China North Industries Group holds 36% of the venture, followed by Aramco’s 35%. A Panjin city-backed enterprise owns the rest.