Saudi Aramco has signed a partnership contract with Chinese Petrochemical Corporation (Sinopec) for the development of the Yanbu refinery, which has lacked an international partner since the US’ ConoccoPhilips walked out of the deal in April 2010.

A partnership with Sinopec has been under consideration for some time. The firm was understood to be in talks with Aramco as early as May 2010, although they subsequently went cold before being restarted in late 2010 (MEED 28:01:11).

The deal will give Aramco a 62.5 per cent equity stake in the project, and Sinopec the remaining 37.5 per cent.

In the meantime, Aramco established a separate subsidiary, the Red Seas Refining Company, to develop the project alone.

The fate of the Yanbu refinery was thrown into doubt after ConoccoPhilips’ exit and a project finance deal for the $10bn project was put on hold, despite having already received indicative commitments from banks interested in funding the development.

Aramco continued with the construction of the Yanbu refinery without seeking financing for it to capitalise on the low engineering procurement and construction bids it received for the project.

Once completed, Yanbu will process 400,000 barrels a day (b/d) of Arabian heavy crude oil to produce refined products including 90,000 b/d of gasoline, 263,000 b/d of ultra-low sulfur diesel, 6,300 metric tons per day (MTD) of petcoke and 1,200 MTD of sulfur.