During Saudi Arabian Crown Prince Mohammed Bin Salman's two-day trip to China this February, the oil giant Saudi Aramco and Chinese firms signed an agreement to develop a joint refining and petrochemical complex worth more than 10 billion U.S. dollars. 

Aramco and China North Industries Corporation, officially abbreviated as Norinco, along with Panjin Sincen, agreed to create “the largest Sino-Foreign” joint venture. The new complex will be located in the city of Panjin in China's Liaoning Province and is set to start operation in 2024.

The inauguration ceremony was held in Panjin over the weekend, as the new company, Huajin Aramco Petrochemical Co. Ltd., was launched with a refining capacity of 15 million tonnes of oil and a production capacity of 1.5 million tonnes of ethylene and 1.3 million tonnes of paraxylene a year. Its annual sales revenue is expected to exceed 100 billion yuan.

The new company is a clear demonstration of Saudi Aramco's strategy to move from a buyer-seller relationship to one where the company can make significant investments to contribute to China's economic growth and development, said Amin Nasser, Saudi Aramco's president and CEO. He also believes this project will serve as a model for collaboration between China's Belt and Road Initiative and Saudi Arabia's Vision 2030.

According to the agreement signed in February, Saudi Aramco holds 35 percent of the joint venture, Norinco and Panjin Xincheng hold 36 percent and 29 percent respectively. Panjin, about 500 km northeast of Beijing, is an important petrochemical industrial base of the country. The total sales income of more than 90 petrochemical enterprises in the city reached 189.8 billion yuan in 2018.

"This city is home to a large number of skilled petrochemical workers and technicians, and this project will create 3,000 jobs in Panjin," Nasser said. The city has also reserved 14 square kilometers of land and built a 300,000-ton crude oil terminal for the project.

Above-scale petrochemical industrial added value rose by 15.1 percent year on year in Liaoning last year, with crude processing volume up 13.5 percent to 80.96 million tonnes. According to the provincial department of commerce, Liaoning's actual use of foreign capital increased by 36.2 percent in 2018. Chen Qiufa, secretary of the CPC Liaoning Provincial Committee, hoped the new joint venture could help optimize the structure of the petrochemical industry of the province and boost the local economy.