CHINESE state-owned chemical company ChemChina has signed a memorandum of understanding (MoU) with Saudi Aramco and the National Industrial Clusters Development Program (NICDP) to explore chemical investment opportunities in Saudi Arabia.
The MoU was signed yesterday by Aramco CEO Amin Nasser, NICDP president Khalid Al-Salem, and ChemChina president Yang Xingqiangduring, during a delegation visit from Saudi Arabia in connection with the G20 summit. The summit will take place in Hangzhou, China on 4–5 September.
The agreement will allow NICDP and ChemChina to explore investment opportunities in renewable energy including the development of manufacturing facilities for the organo-silicone and solar energy photovoltaic (PV) value chain, specialty chemicals and automotive tyres in Saudi Arabia using local raw materials. It also calls for the potential development of other industrial sectors including performance fibres for aerospace, industrial non-tyre rubber; animal feed additives, and engineering plastics.
Aramco will supply crude and oil products to the agreement to be used as feedstock for ChemChina’s refineries through a long-term crude oil sales agreement that will commence in 2017. The companies will also assess exchanging oil products from ChemChina’s refineries to Aramco.
In April, the Deputy Crown Prince of Saudi Arabia, Mohammed bin Salman announced a new national strategy, Saudi Vision 2030, aimed at reducing the country’s dependence on oil. The plan will list up to 5% of Aramco, valuing the state firm at up to US$3trn. The move came after Aramco recorded a US$98bn deficit last year.
“This agreement is a forward step in realising the Saudi Vision 2030 goals,” said Nasser, “Our global leadership in oil and petrochemicals is well-known, and this collaboration will lay the groundwork for significant growth in industrial capabilities, expanded employment and enable new and emerging industries in the Kingdom.”
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