28.03.2023
On March 26 and 27, Saudi oil giant Saudi Aramco successively announced two large-scale investment plans in China. On March 28, Chinese President Xi Jinping had a telephone conversation with Saudi Crown Prince and Prime Minister Mohammed bin Salman.
(Deutsche Welle Chinese website) According to Chinese official media reports, Xi Jinping had a phone call with Saudi Crown Prince and Prime Minister Mohammed bin Salman on March 28, asking him to convey his best wishes to King Salman and his Ramadan greetings. Xi Jinping said that China-Saudi Arabia relations are currently at the best period in history, and China is willing to work with Saudi Arabia to continue to firmly support each other on issues concerning each other’s core interests and make more contributions to promoting peace, stability and development in the Middle East. Xi Jinping also said, “Recently, with the joint efforts of China, Saudi Arabia, and Iran, the Beijing Dialogue between Saudi Arabia and Iran was successfully held and achieved major results, which will help improve relations between Saudi Arabia and Iran, strengthen the unity and cooperation of regional countries, and ease regional tension It has a significant demonstration effect and has been widely praised by the international community.”
Saudi Crown Prince and Prime Minister Mohammed bin Salman expressed appreciation for China’s support of “efforts to develop good-neighborly relations,” according to the Saudi Press Agency. The two leaders emphasized the importance of Saudi Arabia’s strategic relationship with China.
Invest in Northeast
Last Sunday (March 26) and this Monday (March 27), the Saudi oil giant Saudi Aramco announced two huge investment plans in China. One is to join hands with China’s North Industries Group and Panjin Xincheng Industry Group to build a large-scale integrated refining and chemical plant in Panjin City, Liaoning Province. According to the announcement information, the three parties will jointly invest in the establishment of Huajin Aramco Petrochemical Co., Ltd., and the shareholding ratios of Saudi Aramco, North Industries Group and Panjin Xincheng Industrial Group are 30%, 51% and 19% respectively. The joint venture will include an oil refinery with a daily processing capacity of 300,000 barrels, a chemical plant with an annual output of 1.65 million tons of ethylene and 2 million tons of paraxylene. The project will start construction in the second quarter of 2023 and is expected to be fully operational in 2026. Saudi Aramco will supply up to 210,000 barrels per day of crude oil to the complex. Panjin Xincheng Industry Group said on its WeChat public account that it expects a total investment of 83.7 billion yuan ($12.19 billion) in the project.
Aramco earlier this month reported annual profits of as much as $161 billion in 2022, the highest ever for a global energy company. Norinco is the largest manufacturer of army equipment in China and in the world.
Acquired 10% equity of Zhejiang Rongsheng Petrochemical
On March 27, Saudi Aramco signed a final agreement to acquire a 10% stake in Rongsheng Petrochemical Co., Ltd. (Rongsheng Petrochemical), headquartered in Hangzhou, Zhejiang Province, at a price of 24.6 billion yuan (about 3.6 billion U.S. dollars). According to the agreement, Saudi Aramco will supply 480,000 barrels per day of crude oil to Zhejiang Petrochemical Co., Ltd. (Zhejiang Petrochemical), a subsidiary of Rongsheng Petrochemical. Saudi Aramco Overseas Co., Ltd., a wholly-owned subsidiary of Saudi Aramco, will acquire shares in Rongsheng Petrochemical. The two sides plan to cooperate in trade, refining, chemical production, crude oil storage and technology licensing. The transaction is expected to close by the end of 2023. Rongsheng Petrochemical holds a 51 percent stake in Zhejiang Petrochemical, according to Chinese media reports. Zhejiang Petrochemical manages and operates the largest integrated refining and chemical unit in China, with a daily crude oil processing capacity of 800,000 barrels and an annual ethylene output of 4.2 million tons.
Explore cooperation with Guangdong
In addition to the above two transactions, on March 26, the Guangdong provincial government signed a memorandum of cooperation with Saudi Aramco, proposing a cooperation framework for exploring investment opportunities in various fields, including energy cooperation, research and innovation, industrial projects, financial cooperation, talent communication etc. Guangdong Province already has a large petrochemical plant invested by Exxon Mobil and BASF of Germany.
Xi Jinping visited Saudi Arabia last December and met with Crown Prince Mohammed
Last December,Xi Jinping Pays State Visit to Saudi Arabia, and signed a comprehensive strategic partnership agreement with King Salman. The two sides emphasized that strengthening energy cooperation is a manifestation of the important strategic partnership between the two countries. China’s Xi Jinping called for oil trade in yuan at a Gulf summit in Riyadh, according to Reuters. But after the meeting, Chinese state media made no mention of the yuan settlement issue.
(comprehensive report)
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