º£½ÇÖ±²¥ will host a China-Arab summit on Dec. 9 attended by Chinese President Xi Jinping, with the leaders of the two countries expected to discuss trade ties and regional security.
Xi’s visit comes at a time when US-Saudi ties are at a nadir, uncertainty weighs on global energy markets with the West imposing a price cap on Russian oil and as Washington warily eyes China’s growing influence in the Middle East.
The Chinese delegation is expected to sign dozens of agreements with º£½ÇÖ±²¥ and other Arab states covering energy, security and investments, diplomats have told Reuters.
Below are some details about oil, trade and security relations between China and º£½ÇÖ±²¥.
OIL TRADE
China is º£½ÇÖ±²¥â€™s largest trading partner, with bilateral trade worth $87.3 billion in 2021. Chinese exports to º£½ÇÖ±²¥ reached $30.3 billion, while China’s imports from the kingdom totalled $57 billion.
º£½ÇÖ±²¥ is China’s top oil supplier, making up 18 percent of China’s total crude oil purchases, with imports totalling 73.54 million tons (1.77 million barrels a day) in the first 10 months of 2022, worth $55.5 billion, Chinese customs data shows.
Oil imports last year amounted to 87.56 million tons, worth $43.9 billion, making up 77 percent of China’s total merchandise imports from º£½ÇÖ±²¥.
State-run Saudi Aramco has annual supply deals with half a dozen Chinese refiners including Sinopec, CNPC, CNOOC, Sinochem, Norinco as well as private refiner Zhejiang Petrochemical Corp.
REFINERIES
Aramco in early 2022 made a final investment decision to build a $10 billion refinery, petrochemical complex in northeast China, marking its single largest investment in China.
Named Huajin Aramco Petrochemical Company, the joint venture groups Aramco, Huajin Chemical Industries Group Corporation (000059.SZ) — a unit of defense conglomerate Norinco-- and Panjin Xincheng Industrial Group.
The project, expected to be operational in 2024, combines a 300,000-bpd refinery and 1.5 million tons per year ethylene plant, with Aramco set to supply up to 210,000 bpd crude oil.
Aramco’s only other similar investment in China is a 25 percent stake in Refining and Petrochemical Company Ltd. in Fujian province controlled by state refining giant Sinopec Corp. , which began in 2008 operating a 280,000 bpd refinery and a 1.1 million ton per year (tpy) ethylene complex.
Aramco in October of 2018 signed a memorandum of understanding with Zhejiang provincial government to invest 9 percent in Zhejiang Petrochemical Corp. that operates China’s single-largest refinery of 800,000 bpd. No further progress has been announced since.
Similarly, Sinopec owns 37.5 percent in Yanbu Aramco Sinopec Refining Co. (YASREF), a JV with Aramco that operates a 400,000-bpd refinery in Yanbu on the Red Sea coast.
FINANCIAL
China’s state-owned Silk Road Fund is part of a consortium led by US-based EIG Global Energy Partners that in mid-2021 closed a deal to buy 49 percent of Saudi Aramco’s oil pipelines business for $12.4 billion.
Silk Road is also part of a consortium led by BlackRock Real Assets and Hassana Investment Company that announced in February completion of a 49 percent stake acquisition in Aramco Gas Pipelines Company for $15.5 billion.
POWER
Saudi utility developer ACWA Power, partly owned by the Saudi sovereign wealth fund, said in September that it agreed with Silk Road Fund to jointly invest in a 1.5 gigawatt (GW) gas-fueled power plant in Uzbekistan for $1 billion, part of Beijing’s One Belt One Road initiative.
State-run China Energy Engineering Corp. (CEEC) is building a 2.6-GW solar power station in Al Shuaiba in º£½ÇÖ±²¥, also owned by ACWA Power, the Middle East’s largest solar project.
MILITARY, SECURITY
Saudi Advanced Communications and Electronics Systems Co. (ACES) signed a deal with China Electronics Technology Group to manufacture unmanned aerial vehicle payload systems in the kingdom, Saudi English-language newspapers Arab News and Saudi Gazette reported in March.
The UAE in February said it plans to order 12 L-15 light attack planes from China with the option of purchasing 36 more.
