Saudi Basic Industries Corporation, or SABIC, and China Petroleum and Chemical Corp., or Sinopec, have signed an agreement in Riyadh to explore opportunities in new petrochemical projects, SABIC said Monday.
The agreement also confirms the commitment of the two companies to a 260,000 mt/year polycarbonate joint venture to be constructed at Tianjin in China and scheduled for startup in 2015, SABIC said in a statement.
The agreement was signed by Sinopec Chairman Fu Chengyu and SABIC Chairman Prince Saud bin Abdullah bin Thenayan Al Saud. Al Saud is also the Chairman of the Royal Commission for Jubail and Yanbu -- which are the two hubs for petrochemical industries in Saudi Arabia. Visiting Chinese Prime Minister Wen Jiabao was present during the signing ceremony.
China and Saudi Arabia have inked several economic agreements during Jiabao's visit to Saudi Arabia. This includes an agreement signed between Saudi Aramco and Sinopec to construct a 400,000 b/d refinery in Yanbu. Sinopec is also in talks with Saudi Aramco and US ExxonMobil to expand capacity at the existing refinery run by Fujian Refining and Petrochemical Company, which is a joint venture between Sinopec, the government of Fujian province, Saudi Aramco and Exxon Mobil.
Jiabao's Persian Gulf tour comes amid growing tensions over US-led sanctions imposed on Iran because of its ongoing nuclear program. Wen's visit to the hydrocarbons-rich Gulf comes days after US Treasury Secretary Timothy Geithner visited Beijing to seek support for a new set of sanctions imposed on Iran that aim to curtail exports of petrochemicals, oil and gas exports from Iran.
About 11% of China's oil imports come from Iran and Saudi Arabia is the only country with enough spare capacity to partially meet China's oil requirements in case its imports from Iran do drop.
Jiabao will also visit the UAE and Qatar, both oil and petrochemicals exporting countries, as a part of the visit.
