Saudi Aramco, the world’s largest oil-exporting company, signed a preliminary agreement with China's Petroleum and Chemical Corporation, better known as Sinopec, to boost collaboration in oil and gas projects in the kingdom.
The two companies will look for potential opportunities in refining and petrochemicals, engineering, procurement and construction, oilfield services, upstream and downstream technology, as well as carbon capture and hydrogen processes, Aramco said on Wednesday.
The companies will also discuss opportunities for the establishment of a local manufacturing centre in the King Salman Energy Park, a big industrial project in the eastern province of the kingdom that is being developed by the state-owned energy company.
“This latest collaboration will help to further advance our strategic relationship with Sinopec into key areas of mutual benefit within the kingdom,” said Mohammed Al Qahtani, Aramco's senior vice president of downstream.
The two companies are already teaming up in joint venture projects in China and in Saudi Arabia.
These include Fujian Refining and Petrochemical Company and Sinopec Senmei (Fujian) Petroleum Company in China, as well as the Yanbu Aramco Sinopec Refining Company in Saudi Arabia.
The latest agreement “introduces a new chapter of our partnership in the kingdom”, Sinopec president Yu Baocai said.
China, the world's second-largest economy, is building a number of projects in different countries as part of its Belt and Road initiative.
“The two companies will join hands in renewing the vitality and scoring new progress of the Belt and Road Initiative and Vision 2030,” he said.
The latest agreement comes at a time when Aramco is continuing to expand its operations and partnerships to boost growth.
Earlier this week, the company said it would acquire Kentucky-based motor oil maker Valvoline's lubricants business for $2.65 billion.
The deal, subject to customary closing conditions and regulatory approvals, is expected to close in late 2022 or early 2023.
In May, Aramco also said it was exploring further collaboration with Thailand’s national oil company PTT, as it expands its downstream presence in Asia.
The two companies signed a preliminary agreement to strengthen co-operation across crude oil sourcing and the marketing of refining and petrochemical products and liquefied natural gas.