RIYADH: Crude oil from Saudi Arabia could be supplied to the Chinese province of Shandong under a new agreement struck between Aramco and an energy firm in the region.
The Saudi oil giant has signed a Memorandum of Understanding with Shandong Energy Group, which includes a potential crude oil supply agreement and chemicals products offtake deal, supporting Aramco’s role in building a thriving downstream sector in Shandong Province.
The MoU also signals the firms are exploring collaboration on integrated refining and petrochemical opportunities in China.
The signing ceremony, which was conducted with the participation of Shandong Provincial People’s Government, underlined the importance of Aramco’s collaboration with Chinese companies.
The scope of the MoU extends to cooperation across technologies related to hydrogen, renewables and carbon capture and storage.
Mohammed Al Qahtani, Aramco senior vice president of downstream, said: “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.
“I am delighted that this spirit of cooperation is being extended across hydrogen, renewables and carbon capture and excited by the potential for further cooperation in these key areas which will shape our collective future.”
Li Wei, chairman of Shandong Energy Group, said: “Both Shandong Energy and Aramco are important players in the international energy arena. We share a lot of common interests, complementary strategies with expansive scope for cooperation, especially in oil and gas resources development and integrated refining and petrochemicals development along the whole industrial chain.”
The announcement 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.
The MoU comes amid a strengthening of ties between Saudi Arabia and China, spurred by the visit of Chinese President Xi Jinping to the Kingdom.
His attendance led to the signing of 35 investment agreements involving organizations from the two countries.
They cover a range of sectors, including green energy, technology and cloud services.
Transportation, logistics, medical industries, construction and manufacturing are also covered by the deals, as is a petrochemicals project, housing developments and the teaching of the Chinese language.
The agreements are worth about $30 billion, and come as China seeks to shore up its COVID-19-hit economy and the Kingdom continues to diversify its economic and political alliances in line with Vision 2030.