State-owned energy companies Saudi Aramco and Shandong Energy group have agreed to explore options to collaborate on integrated refining and petrochemical projects.

The firms have signed a Memorandum of Understanding (MoU) deal that includes a possible crude oil supply arrangement and a chemical products offtake agreement. Aramco’s statement said the deal would help the company develop a downstream economy in China’s Shandong province. The MoU also mentions collaboration in hydrogen, renewables, and carbon capture and storage technologies.

Following Chinese President Xi Jinping’s recent visit to Saudi Arabia, the two countries’ officials reiterated the importance of global oil market stability and Saudi Arabia’s role in it, according to a joint statement on Friday.

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.”

During a three-day visit to Riyadh, Jinping signed several agreements with Saudi officials. According to news agency France24, Beijing intends to strengthen its Covid-hit economy and the Saudis, long-time US allies, seek to diversify their economic and political alliances.