Saudi Aramco to sign China refinery deals as crown prince visits

BUILDING BLOCK

It is not clear what new details will be in the MOU with Norinco expected during the visit, as the two companies first announced an alliance in May 2017 during Saudi ruler King Salman's visit to Beijing.

Under that earlier MOU, the companies agreed to build a refinery capable of processing 300,000 barrels per day of crude and a facility that would make 1 million tonnes per year of ethylene, a building block for petrochemicals, at an estimated cost of over $10 billion.

A senior Aramco executive said last June that he expected the front-end engineering for the Norinco project to be finished by mid-2019, following which the company will take a final investment decision.

Norinco public affairs officials were not immediately available for a comment.

Aramco officials did not reply to a request for comment sent by email.

All the sources declined to be identified due to the sensitivity of the matter.

Meanwhile, the Zhejiang agreement would give Saudi Aramco control of the 9-percent stake in the project held by the Zhejiang provincial government.

The agreement follows an earlier MOU that Aramco signed in October to invest in Zhejiang's project, which is planned as a refinery to process 400,000 bpd of crude and associated petrochemical facilities in the city of Zhoushan, south of Shanghai.

Reuters was not able to immediately reach Zhoushan Ocean Development and Investment Co Ltd, which holds the 9-percent stake in Zhejiang Petrochemical for the provincial government, for a comment.

China has had to step carefully in its relations with Riyadh due to Beijing also having close ties with Saudi's regional foe Iran.

On Wednesday, the day before the crown prince arrives, Xi told the speaker of Iran's parliament that China's desire to develop close ties with Iran will remain unchanged, regardless of the international situation.