Saudi Aramco signed an agreement on Friday to form a joint venture with Chinese NORINCO Group and Panjin Sincen to develop a fully-integrated refining and petrochemical complex in the city of Panjin in the Liaoning province of China.

The total value of the project is more than $10 billion, making it the largest Sino-foreign joint venture, the state-run energy giant said in a press release.

According to the statement, the partners will form Huajin Aramco Petrochemical Co. Ltd. as part of a project that will include a 300-thousand-barrel-per-day refinery with a 1.5-million-metric-tonnes-per-annum (mmtpa) ethylene cracker and a 1.3 mmtpa paraxylene unit.

Saudi Aramco will supply up to 70 percent of the crude feedstock for the complex, which is expected to start operations in 2024. The company will hold a 35 percent stake in the newly-formed company, with NORINCO and Panjin holding 36 percent and 29 percent interests, respectively.

Saudi Aramco's CEO Amin Nasser said the agreement demonstrates the company’s strategy to move from beyond a buyer-seller relationship, to one where it can make significant investments to contribute to China's economic growth and development.

"Our participation in the integrated refining and petrochemical project in Panjin will strengthen our collaborative efforts to enhance energy security, revitalize key growth sectors and industries in Liaoning and also meet rising demand for products and goods in China’s Northeast region," he added.

According to the press release, there are additional plans to establish a fuel retail business, which will further integrate into the value chain. By the end of 2019, the formation of a three-party marketing joint venture is expected between Saudi Aramco, North Huajin and Liaoning Transportation Construction Investment Group Co., Ltd. to develop a network of retail fuel stations in the target markets.

By Hale Turkes

Anadolu Agency

energy@aa.com.tr