Saudi Arabia said to eye more oil sales to China

State-run Saudi Arabian Oil Co (Saudi Aramco) is in supply talks with petrochemical conglomerates that are building some of the world’s biggest plants in China, Bloomberg reported, citing Mushabab Al-Qahtani, Aramco’s vice-president of marketing department (Asia unit).

​​Al-Qahtani did not name the companies. He added that China is expected to import more sulfurous sour crude – the type that is produced by Saudi Arabia.

Companies that are currently building facilities in China include Rongsheng Petrochemical Co, which is building a $24 billion refinery in Zhejiang province, and Hengli Group that has planned a plant in the Liaoning region.

“China is one of our oldest and largest customers,” Al-Qahtani said. “In recent years, growth in China has slowed as incremental demand preferred low-sulfur crude and as Aramco is implementing OPEC cuts. However, Aramco still has ambitious plans for China.”

China is planning to add 2.2 million barrels per day (bpd) of refining capacity by 2022, mostly designed to run sour crude. Saudi Arabia is ready to meet that demand, Al-Qahtani said.

“In fact, China will need much more sulfur crude in the future,” he added.

As much as 60 percent of China’s oil imports in 2017 were sour crude, of which 23 percent came from Saudi Arabia, Al-Qahtani said.

Saudi Aramco, which is seeking a partnership with China National Petroleum Corp. to buy a stake in the 260,000 bpd Anning refinery, expects to make an investment decision on the project early next year, Al-Qahtani added.

The Saudi company will also make a final investment decision on building an integrated refining and petrochemical facility with China North Industries Group in Liaoning, he said.