Saudi Aramco has signed a memorandum of understanding (MoU) with China's Shandong Energy Group to explore collaboration on integrated refining and petrochemical opportunities in China.
The agreement was made during the visit of Chinese President Xi Jinping to the kingdom that began on 1 December. During the visit, the two countries signed a slew of deals in several sectors, including green energy, information technology, cloud services, transportation and logistics. The deals were reportedly worth $30 billion.
Aramco's MoU includes a potential crude oil supply agreement and chemicals products offtake agreement, supporting its "role in building a thriving downstream sector in Shandong Province", the oil company said.
The scope of the MoU extends to cooperation across technologies related to hydrogen, renewables and carbon capture and storage.
“Through collaborations such as this in China’s energy heartland, we are creating new pathways for growth in a country that is driving the increased integration of refining and petrochemical processes," said Mohammed Y. Al Qahtani, Aramco Senior Vice President of Downstream.
The deal strengthens Aramco’s efforts to support demand for energy, petrochemicals and non-metallics in China, as the company seeks to expand its liquids to chemicals capacity to up to 4 million barrels per day by 2030.
Saudi Arabia is China's top oil supplier, making up 18% of China's total crude oil purchases, with imports totaling 73.54 million tonnes (1.77 million barrels a day) in the first 10 months of 2022, worth $55.5 billion, according to a report that cited Chinese customs data.
Aramco has annual supply deals with half a dozen Chinese refiners including Sinopec, CNPC, CNOOC, Sinochem, Norinco as well as private refiner Zhejiang Petrochemical Corp.
