Saudi Aramco is expected to sign a final deal with PetroChina, China’s second-largest state-run refiner, within six months to invest in its Yunnan refinery, Saudi Arabia’s Energy Minister Khalid al-Falih told Reuters on Wednesday (23/08).
The world’s top oil exporter aims to push ahead with its oil investments in China to become the country’s biggest source of crude supply and a major player, Falih said.
“Yunnan (talks) have reached advanced stages … We aim to finalize Yunnan within six months,” Falih, who is also the chairman of Aramco, said.
Aramco will own a “big stake” in the 260,000-barrel per day Anning plant in Yunnan province, he added.
Aramco is looking to invest $1 billion-$1.5 billion in the refinery as well as the retail assets of PetroChina, sources told Reuters in 2015.
PetroChina aims to start operating the new refinery in the in October after several delays, boosting the nation’s already-surging crude imports.
PetroChina will also will consider taking part in Aramco’s initial public offering (IPO) set for next year based on market conditions, the Chinese oil major said in March.
A PetroChina official told Reuters in March that if the refinery deal was finalised with Aramco, the Saudi state oil giant would supply at least part of the refinery’s crude oil requirements.
Saudi Arabia has lost out to Russia as the top crude supplier to China.
Falih said Saudi Arabia aims to break the slow pace in the progress of Saudi projects in China and push for more investments between the two nations.
“The goal is that not only the Kingdom will be China’s largest crude exporter but the largest in-market investor,” Falih said, one day ahead of a Chinese-Saudi investment forum to be held in Jeddah on Thursday.
In May, Chinese defense conglomerate China North Industries Group Corp (Norinco) signed a framework agreement with Aramco to build a refinery and chemicals complex in northeast China.
That investment would boost Aramco’s presence in China’s massive refining industry, adding to its 25 percent stake in the Fujian refinery in southeast China operated by state refiner Sinopec Corp.