Saudi Arabia, China have chance to develop integrated downstream sector: Aramco SVP

Highlights Aramco, Sinopec to build phase two of integrated refining project in Fujian Aramco also signed crude offtake agreement with Shandong Saudi Arabia's recent petrochemicals projects with China are an opportunity for both countries to develop an integrated downstream sector, Mohammed Al Qahtani, Saudi Aramco's SVP of downstream, said Dec. 18. Receive daily email alerts, subscriber notes & personalize your experience. The kingdom and China have signed a raft of agreements to cooperate in the downstream sector, which the Gulf country identifies as critical for its future strategy in developing high value, lower-carbon products. The interest in developing refining and chemicals hub was reiterated during Chinese President Xi Jinping's visit to Riyadh earlier this month. Aramco also signed an agreement with Chinese company Shandong Energy to explore integrated refining and petrochemicals opportunities in China, the companies said in a statement Dec. Aramco will also explore a potential crude supply agreement and chemicals offtake agreement, which will see Aramco building a downstream hub in the eastern Shandong province. Saudi Arabia is China's top crude supplier with most of the country's refineries designed to crack Middle East crudes. China is central to Aramco's strategy to diversify into more specialized high-value chemical products and less-carbon intensive hydrocarbon usage, under which it has said it plans to convert up to 4 million b/d of crude oil to chemicals. Aramco has an interest in China's downstream sector as it looks to lock in demand for its crude in Asia's largest economy and it decided in March to move forward with a 300,000 b/d oil refinery and petrochemical project in northeast China. Aramco had withdrawn from the project in 2020 but in September 2021 the partners revived negotiations. It is expected to be operational in 2024 and will cost some $10 billion.