Sino-Saudi Energy Cooperation opens up a new chapter and seeks a new chapter

On December 18, 2022, Saudi Aramco said in a statement on its official website that it signed an agreement with Sinopec to build an oil refining and chemical complex project with an annual output of 16 million tons of oil refining and 1.
5 million tons of ethylene cracking in Gulei, Fujian Province
.
At the same time, Saudi Aramco, Sinopec and SABIC also signed a memorandum of understanding to study the joint development of a new refining and chemical project in Yanbu, Saudi Arabia, and achieve synergistic optimization
with the Yanbu refinery.

"These projects will further support the development of modern, integrated and efficient refining and chemical industries in China and Saudi Arabia, and reinforce our long-term commitment to remain a reliable energy and chemical supplier
to Asia's largest economy.
" Said Mohammed Khatani
, senior vice president of downstream operations at Saudi Aramco.
With the gradual improvement of energy and chemical cooperation between China and Saudi Arabia, the two countries are expected to open a new chapter
of cooperation in the new year.

The two sides have a long history of cooperation

After years of intensive cultivation, Sinopec and Saudi Aramco have joint ventures such as Fujian United Petrochemical in China, Sinopec Simei (Fujian) Oil Company in China, and Sinopec Refining Company
in Yanbu Aramco, Saudi Arabia.

According to the General Administration of Customs, energy trade, dominated by crude oil, is the core of
China's trade with Saudi Arabia.
In January ~ October last year, China imported 73.
76 million tons of crude oil from Saudi Arabia, with a total import value of 55.
52 billion US dollars
.
This alone accounts for 83%
of Saudi Arabia's total exports to China.
However, many years ago, Sino-Saudi Energy Chemical Cooperation began to transform
into a chemical industry.

Fujian United Petrochemical is a Sino-foreign joint venture large-scale petrochemical enterprise jointly established by Fujian Refining and Chemical Co.
, Ltd.
, Saudi Aramco China Co.
, Ltd.
and ExxonMobil China Petrochemical Corporation with a 50%:25%:25% shareholding ratio, with a total investment of about 40 billion yuan
.
In order to explore the Chinese market, Saudi Aramco invested in Fujian United Petrochemical
.
In November 2009, Fujian Oil Refining Ethylene Integration Project invested and built by Fujian United Petrochemical was put into commercial operation
.

Draw a new blueprint for cooperation

In 2022, Sinopec and Saudi Aramco accelerated their cooperation
.
On March 8 of that year, Sinopec and Saudi Aramco signed a memorandum of understanding covering Sinopec's existing refining and chemical projects and future expansion projects
.
The two parties will give full play to their strengths to further strengthen their long-term relationship and jointly optimize the operation of
the joint venture Fujian United Petrochemical.
In the same month, Fujian Zhongsha Petrochemical Co.
, Ltd.
, a joint venture company, was formally established, with a total investment of 42.
07 billion yuan, which is the largest Sino-foreign joint venture project
in Fujian Province so far.

Yu Baocai, President of Sinopec, said that the two sides have carried out a lot of fruitful cooperation in China and Saudi Arabia over the years, and this cooperation is a new milestone on the basis of the existing cooperation, which fully demonstrates the high degree of mutual trust and mutual recognition of all parties, and also strengthens the confidence
of jointly coping with the energy transition.

Towards comprehensive cooperation with points and areas

Fujian Petrochemical Industry "Two Bases and One Special Zone" is a key construction area
.
The development of the "two bases" is inseparable from the cooperation
between China and Saudi Arabia.
Fujian United Petrochemical is located in Quanzhou Quangang District Petrochemical Base, while Gulei Ethylene large-scale energy cooperation project is located in Zhangzhou Gulei Petrochemical Base
.
It is with the large-scale ethylene energy cooperation project that the investment in the Gulei petrochemical base project has a "siphon phenomenon"
.
Up to now, Gulei Petrochemical Industrial Park has put into operation, under construction, signed contracts and focused on 53 industrial projects, with a total investment of 322.
691 billion yuan, and an annual output value of 422.
495 billion yuan
is expected after production.

In recent years, the cooperation between Chinese and Arab oil enterprises has also gone far beyond the scope of crude oil trade, and the mutual investment between the two sides has increased significantly, and a closer cooperative relationship
has been established in the petrochemical industry chain.
Chinese energy companies are gradually expanding their presence in the petrochemical industry in Arab countries, especially the development of upstream oil blocks and the construction
of downstream facilities such as the Yanbu refinery.
Arab countries such as Saudi Arabia are also investing heavily in China's oil industry
.
At the beginning of 2022, Saudi Aramco made the final investment decision to participate in the development and construction of a large-scale integrated refining and chemical complex in northeast China, with a total investment of 10 billion yuan, the company's largest single investment
in China.

Today, as Western traditional partners shrink investment in fossil fuels, many Arab countries have developed energy transition plans to diversify
their economies.
On the other hand, China, as the world's largest renewable energy investor and equipment manufacturer, has rich experience
in solar and wind power generation.
It is precisely because the two sides complement each other's advantages that the prospects for cooperation between China and Saudi Arabia in the field of clean energy will be brighter
.