Saudi Arabia is eager to collaborate with China in developing natural gas, crude-to-chemicals and mining projects, within and outside the kingdom, because the world’s second biggest economy is taking a lead in various sectors, energy minister Prince Abdulaziz bin Salman said June 11.
“When it comes to oil demand in China, it is still growing so of course we have to capture some of that demand,” he told the Arab China Business Conference streamed live from Riyadh. “They will be engaged with us when it comes to gas. It will be more in the midstream part along with others.”
In April, Saudi Arabia was the top oil supplier to China, delivering 2.07 million b/d (8.46 million mt) of crude, down 5.3% year on year and down 1.8% from March on a barrels-per-day basis, data from China’s General Administration of Customs showed May 20.
Saudi Arabia has traditionally been China’s top crude supplier, with most of the country’s refineries designed to crack Middle East crudes.
China is central to Saudi 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 signed a number of agreements, which include potential crude supply and chemical offtake agreements, with Chinese entities in December during the visit of President Xi Jinping to Riyadh.
Converted chemicals
Aramco is already boosting investments in China to guarantee long-term oil supply to the world’s second biggest oil consumer.
Aramco will begin construction in 2023 of a 300,000 b/d refinery in northeast China, in which it has a 30% stake.
On top of the crude distillation capacity, the complex will be integrated with a 1.65 million mt/year ethylene cracker and a 2 million mt/year PX paraxylene unit, which are expected to be fully operational by 2026. Aramco will supply 210,000 b/d of crude to the complex.
In March, Aramco signed an agreement to buy a 10% stake in Rongsheng Petrochemical, which allows it access to the massive 800,000 b/d refinery owned by Zhejiang Petroleum and Chemical Co.
Saudi Arabia also wants to partner with China as the country seeks to produce converted chemicals, most of which will go to Asia, mainly to China and India, Prince Abdulaziz said June 11.
Saudi Arabia is interested in working with China on crude-to-chemicals projects within and outside the kingdom, the minister added.
Saudi Aramco is working with SABIC to build a 400,000 b/d crude to chemicals project in Ras al-Khair.
Saudi Arabia also wants to collaborate with China in developing the Gulf country’s renewables projects, including importing Chinese expertise to localize production for the sector, he added.
“We will plug them also into mining too and we will work with them in mining abroad, and we have got the right incubators,” the prince said.
In January, Saudi Arabia’s Public Investment Fund and miner Ma’aden announced a joint venture agreement to establish a new company that will invest in mining assets globally to secure minerals for Saudi Arabia’s industrial sector.
“We came to recognize the reality of today that China has taken a lead and will continue to take that lead,” said Abdulaziz. “We do not have to compete with China, we have to collaborate with China.”
-
-
-
-
