China, Saudi ink $65bn deals as king visits

Reuters

Saudi Arabia’s King Salman oversaw the signing of deals worth potentially $65 billion on the first day of a visit to Beijing on Thursday, as the world’s largest oil exporter looks to cement ties with the world’s second-largest economy.
King Salman, who has overseen the launch of an ambitious economic reform plan since his accession two years ago, is on a month-long Asian tour. The visits to countries that are some of world’s fastest growing importers of Saudi oil aim to promote investment opportunities in the kingdom, including the sale of a stake in its giant state firm Saudi Aramco.
Saudi Arabia has sought to boost oil sales to China, the world’s second-largest oil market, after losing market share to Russia last year, by working mostly with China’s top three state oil firms. In Beijing’s cavernous Great Hall of the People, President Xi Jinping told King Salman that China was a reliable and stable oil export market and the two countries should deepen cooperation.
“For a long time, China and Islamic countries have respected each other and had win-win cooperation, and have created a model of the peaceful coexistence of different cultures,” Xi said, according to China’s Foreign Ministry.
King Salman told Xi he hoped China could play an even greater role in Middle East affairs, the ministry added.
“Saudi Arabia is willing to work hard with China to promote global and regional peace, security and prosperity,” King Salman said. Deputy Chinese Foreign Minister Zhang Ming said the memorandums of understanding and letters of intent were potentially worth about $65 billion, involving everything from energy to space, but he did not give details.
“President Xi Jinping and King Salman are old friends,” Zhang said. “Practical cooperation between China and Saudi Arabia has already made major achievements, and has huge potential.”
Besides the MOUs agreed between the two governments, Saudi and Chinese companies signed 21 deals, ranging from exploring investments in oil and petrochemical plants to ecommerce and co-operating in renewable energy markets.
For Saudi Aramco, the potential investments fit with its strategy to expand its refining and chemicals portfolio in its bid to diversify assets and secure long-term agreements for its oil.
An MoU with state-run Norinco will look into building refining and chemical projects in China, while Saudi Basic Industries Corp (SABIC) and Sinopec have agreed to develop petrochemical projects in China and Saudi Arabia.
The Norinco deal could involve exploring the possibility of a greenfield refinery and chemical plant in Panjin, Liaoning province, while also upgrading an existing refinery and petrochemical facility in the same location, an industry source said. Sinopec and SABIC, one of the world’s largest petrochemical companies, join-tly run a refinery in Tinajin.