FUZHOU, China: Saudi Aramco is in revived discussions with Sinopec to invest in the Chinese refiner’s 200,000 barrel-per-day (bpd) Qingdao refinery in east China, Saudi Aramco’s Chief Executive Khalid Al-Falih said on Tuesday.
Sinopec said last week that it was hopeful the two sides would reach a deal in what would be Aramco’s second refinery investment in China after a $5 billion refinery and petrochemical venture in southeast Fujian province that started up earlier this year.
The talks, which began well before the start-up of the Qingdao plant in May 2008, failed to progress partly because of Saudi Aramco’s concerns over China’s fuel price controls.
But analysts said China’s new fuel pricing system in place since January, which more or less warrants a fixed refining margin, provides Aramco with a new lure for investment.
Al-Falih also said it had yet to pin down the timing for supplying 1 million bpd of crude to China, which Sinopec has said would begin next year.
“We have not pinned down the timing, but we are always ready to meet China’s demand,” Al-Falih told Reuters.
When asked if 1 million bpd was a realistic target, he said: “It depends on how demand in China materializes. Once it materializes, we are ready to supply.”
