Saudi Arabia eyes further energy investment in China

03 July 2016

The kingdom aims to elevate partnership with world’s second-biggest energy consumer to the highest level

Saudi Arabia, the world’s biggest oil exporter, aims to further expand its investments in energy sector of China in a bid to strengthen relations with one of its top global clients.

“Saudi Arabia is very keen to elevate partnership in the energy sector to the highest level,” news agency Reuters quoted the kingdom’s Energy Minister Khalid al-Falih as saying in a statement after discussions with China’s Vice Premier Zhang Gaoli and other officials in Beijing during a G20 ministerial meeting.

Al-Falih who also heads the state-controlled oil giant Saudi Aramco, said he hoped Saudi investments could increase to cover all Chinese provinces and that there was room to grow bilateral trade in both energy and other hydrocarbons products such as petrochemicals.

Saudi Arabia wants to see new investment projects carried out by Saudi and Chinese sovereign wealth funds, as both nations share interest in crude oil storage, mining, renewable energy and industrial development, Al-Falih added.

Both Aramco and Saudi Basic Industries Corporation (Sabic) have joint venture businesses in China and new projects under development.

In January Aramco said it was in advanced talks to invest in refineries in China.

Sabic, the world’s top petrochemicals conglomerate, which has been looking to expand at home and abroad, signed an agreement with China’s Shenhua Ningxia Coal Industry Group in May, that could see the Saudi firm building a petrochemicals complex in China.

Sabic is conducting a study and “in light of the results of the study referred to, the parties will take the investment decision to develop the project”, the firm said in a bourse statement.

The joint project will be a greenfield complex located in the Ningxia Hui region of China. Sabic’s Chinese counterpart for the scheme is a unit of Shenhua Group Corporation.

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