Saudi Arabia’s state oil company has suspended a deal to build a $10 billion refining and petrochemicals complex in China, as the company slashes spending to cope with low oil prices.
Saudi Aramco decided to stop investing in the facility in China’s northeastern province of Liaoning after negotiations with its Chinese partners. The uncertain market outlook was behind the decision.
China North Industries Group Corp. and Panjin Sincen were to be the other partners.
The joint venture was signed when Crown Prince Mohammed bin Salman was in Beijing in February last year – and at the time was seen as a landmark deal with a key ally. Saudi Arabia wanted to increase market share in Asia and also has encouraged Chinese investment in the kingdom.
The Chinese side will press ahead with the project, which also includes an ethylene cracker and a paraxylene unit. And the joint venture remains an option for the future.