Saudi Aramco to sign China refinery deals during crown prince visit

Saudi Aramco is the world’s top oil exporter. (File/AFP)
Updated 21 February 2019

Saudi Aramco to sign China refinery deals during crown prince visit

  • It will sign an MOU to build a refinery and petrochemical project in a Chinese province
  • It is also expected to formalize an earlier plan to take a minority stake in Zhejiang Petrochemical

SINGAPORE/DUBAI/BEIJING: Saudi Aramco plans to sign preliminary deals to invest in two oil refining and petrochemical complexes in China during Saudi Arabian Crown Prince Mohammed bin Salman’s state visit to Beijing this week, according to sources familiar with the plans.
Saudi Aramco, the world’s top oil exporter, will sign a memorandum of understanding (MOU) to build a refinery and petrochemical project in the northeastern Chinese province of Liaoning in a joint venture with China’s defense conglomerate Norinco, said three sources with knowledge of the matter.
Aramco is also expected to formalize an earlier plan to take a minority stake in Zhejiang Petrochemical, controlled by private Chinese chemical group Zhejiang Rongsheng Holding Group , said two sources with knowledge of this particular deal. Zhejiang Petrochemical is building a refinery and petrochemical complex in eastern Chinese province of Zhejiang.
The investments could help Saudi Arabia regain its place as the top oil exporter to China, which it has relinquished to Russia for the past three years. Saudi Aramco is poised to bolster its market share by signing supply agreements with non-state Chinese refiners.
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 tons per year of ethylene, a building block for petrochemicals, at an estimated cost of over $10 billion.
A senior Aramco executive said last June 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.
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.
The Saudi delegation, including top executives from Aramco, arrived in Beijing on Thursday for a two-day visit, part of the crown prince’s Asia tour, during which the kingdom has pledged $20 billion of investment in Pakistan and sought additional investment in India’s refining industry.


Etihad launches more fuel-efficient Boeing 787 Dreamliner

Updated 10 min 40 sec ago

Etihad launches more fuel-efficient Boeing 787 Dreamliner

  • Etihad’s CEO Tony Douglas described the aircraft as a flying laboratory for testing that could benefit the entire industry
  • This year, Etihad flew the world’s first passenger flight using sustainable biofuel made from a plant that grows in saltwater
DUBAI: Abu Dhabi’s flagship carrier Etihad Airways announced on Monday it is launching one of the world’s most fuel-efficient long-haul airplanes as the company seeks to save costs on fuel and position itself as a more environmentally-conscious choice for travelers.
Etihad’s “Greenliner” is a Boeing 787 Dreamliner that will depart on its first route from Abu Dhabi to Brussels in January 2020. Etihad’s CEO Tony Douglas described the aircraft as a flying laboratory for testing that could benefit the entire industry.
With fuel costs eating up around a quarter of airline spending, Douglas said the goal of the Greenliner is to be 20 percent more fuel efficient than other aircraft in Etihad’s fleet.
“This is not just a box-ticking exercise,” he told reporters at the unveiling of the initiative at the Dubai Airshow alongside executives from Boeing.
Douglas said the aircraft “not only makes sense economically from a profit and loss account point of view, but because it also directly impacts the CO2 because of the fuel burn.”
Etihad has reported losses of $4.75 billion since 2016 as its strategy of aggressively buying stakes in airlines from Europe to Australia exposed the company to major risks.
Despite its financials, the airline continues to be among the most innovative.
This year, Etihad flew the world’s first passenger flight using sustainable biofuel made from a plant that grows in saltwater. It also became the first in the Middle East to operate a flight without any single-use plastics on board to raise awareness of the effects of plastic pollution.
Aviation accounts for a small but rapidly growing share of greenhouse-gas emissions — about 2.5 percent worldwide. But forecasters expect air travel to grow rapidly in the coming years.
Etihad says it plans to make the Greenliner a “social media star” to bring under sharper focus its developments and achievements worldwide. Douglas said anything that Eithad learns with Boeing from this aircraft’s operations will be open domain knowledge “because it’s about moving the industry forward in a responsible fashion.”
“We’re like a millennial and like all good millennials, they’re really focused on the environment and the sustainability agenda,” Douglas said, referring to Etihad’s 16 years in operation.
The Greenliner will be the only aircraft of its kind in Etihad’s fleet of Dreamliners. The company currently has 36 of the 787s in its fleet with plans to operate 50.
“This is a small step today, but in a very, very long journey,” Douglas said.