China's Norinco and Saudi Aramco form $10-B refinery plan
BEIJING (Reuters) — Chinese defense conglomerate China North Industries Group Corp (Norinco) has signed a framework agreement with state-run oil company Saudi Aramco to build a refinery and chemicals complex in northeast China.
The planned projects—including a 300-Mbpd refinery and an ethylene complex with an annual capacity of 1 MMt—are to be built at an estimated cost of 69.5 B yuan ($10.09 B).
The framework pact, which follows a memorandum of understanding (MoU) in March, marks one of the high-profile agreements signed during China's Belt and Road Forum, the first summit under President Xi Jinping's ambitious plan to promote global trade and investment.
The investment would boost Aramco's presence in China's massive refining industry, adding to its 25% stake in the Fujian refinery in southeast China operated by state refiner Sinopec Corp.
Norinco, the state defense giant that also runs oil and gas businesses, won regulatory approval in 2015 to build the refinery and petrochemicals complex in Panjin, Liaoning province.
Industry analysts have cast doubt over the feasibility of adding a large plant in the region, which traditionally has surplus refining capacity and is far from the main consuming regions.
(Reporting by Chen Aizhu; Additional reporting by Reem Shamseddine in Jeddah, Saudi Arabia; Editing by David Goodman)
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