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Aramco, Sinopec, Exxon to join Chinese venture |
RIYADH: Saudi state oil giant Aramco, US major ExxonMobil and China’s Sinopec will hold on Friday a formal signing ceremony for a multi-billion dollar joint-venture in China’s Fujian province.
The three announced they had finalised the deal to triple the capacity of the Fujian oil refinery in February, pending government approval in both Saudi Arabia and China. When it was agreed in 2005, the project had a price tag of $3.5bn.
“The signature of the partnership accord for the Fujian joint-venture project ... strengthens the solid strategic economic partnership between the kingdom and China,” Aramco said in a statement.
Saudi Oil Minister Ali Naimi and Aramco CEO Abdullah Jumah will attend the signing ceremony in Beijing with senior Sinopec and Exxon executives. Saudi Arabia is the main supplier of crude to China, the world’s second largest energy consumer.
The deal gives Aramco and Exxon a foothold in China’s insular refining sector, dominated by state giants Sinopec and PetroChina.
It would triple Fujian refinery’s capacity to 240,0000 bpd. The expanded refinery will start up in early 2009, Aramco said.
The refinery will process Aramco’s heavy crude, which Chinese refineries find difficult to handle. By investing in the refinery upgrade, Aramco will boost the potential market for its heavier oil.
The deal provides for the construction by the three firms of a petrochemical complex to produce plastics and gasoline blending components, which will include an 800,000 tonne-per-year ethylene cracker.
Aramco, Exxon and Sinopec will also set up a fuel marketing venture that will manage 750 service stations and a network of terminals in Fujian province. That gives Aramco and Exxon access to China’s protected retail sector. – Reuters
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