Riyadh: Chinese President Xi Jinping and Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud yesterday attended a ceremony to mark the opening of a joint-venture refinery – a symbol of Beijing’s deepening involvement in the Middle East.
The event took place in Riyadh on the second day of Xi’s first visit to the region.
The Yasref refinery, in Yanbu Industrial City on the Red Sea, is 62.5-per cent held by Saudi Aramco, while China Petroleum and Chemical Corporation (Sinopec) holds the
balance.
“Yasref represents both companies’ focus on driving downstream growth,” the refinery said in a statement.
Saudi Arabia is China’s biggest global supplier of crude, and state-owned Saudi Aramco says expansion into refining and chemicals fits the kingdom’s goal of economic diversification.
The policy has been given added urgency by a plunge in the
kingdom’s oil revenues.
Yasref is one of five joint-venture refineries in Saudi Arabia. Another four are overseas, including one in Fujian, China.
King Salman in December said he had ordered economic reforms to diversify sources of income and reduce high dependence on oil.
To cope with a record budget deficit due to fall in global crude prices, the kingdom broke with its decades-old generous welfare system and raised fuel, electricity and other prices.
Government spending has also been cut, there is talk of a value-added tax in the tax-free nation, and state assets including Saudi Aramco could be privatised.
Trade between the Gulf nations and China, world’s second largest economy, has been growing.
Two-way commerce between China and Saudi Arabia alone reached $69.1 billion in 2014, according to China’s official Xinhua news agency.
Meanwhile, Aramco said yesterday it was in advanced talks to invest in refineries in China and the company was also in talks with CNPC and Sinopec for investment opportunities in refining, marketing and petrochemicals.
Saudi Aramco chairman Khalid Al Falih also told journalists on the sidelines of the official inauguration of Yasref that there may be opportunities for further expansion in Yanbu, including in “Yasref itself to build other phases a few years after getting profitable operations and getting income from the first phase.”
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