Saudi Arabia’s state oil company Aramco has revived negotiations with Chinese partners to build a refining and petrochemicals complex in the Asian country, reported Bloomberg.
The new complex is planned to be built in the northeastern province of Liaoning.
In 2019, Aramco signed a framework agreement with Norinco and Panjin Sincen to construct a refinery with a crude capacity of 300,000 barrels per day. The $10bn plan also included a 1.5 million tonnes per year (MMtpa) ethylene cracker and a 1.3MMtpa PX unit.
Aramco withdrew from the refinery plan in 2020 due to decreasing oil prices as a result of the Covid-19 pandemic.
To protect its $75bn annual dividend, Saudi Aramco shelved many projects and reduced its spending in 2020.
The latest talks come as the finances of Aramco have been improved in the wake of an increase in crude oil prices, freeing up its cash for investments.
One of the terms being considered in the latest talks is the supply of crude by Aramco’s trading unit, Aramco Trading Co., to the venture.
According to data compiled by Bloomberg, Saudi Arabia was China’s biggest crude supplier in 2021.
It is not yet clear if the terms of the original plan still stand.
By the end of this decade, Aramco has set a target to almost double its global refining network to as much as ten million barrels per day.
In April 2021, Saudi Aramco revived negotiations to acquire a 20% stake of India-based Reliance Industries Limited’s (RIL) oil refining and petrochemical unit.
The deal, which was estimated to be worth $15bn in 2019, was set to be finalised in 2020 but was delayed due to the Covid-19 pandemic.