China and Saudi Arabia (hereinafter referred to as Saudi Arabia) have made new breakthroughs in oil project cooperation.

On February 22, Saudi Crown Prince Mohammed bin Salman concluded his two-day visit to China. During their visit to China, China and Saudi Arabia signed two rounds of memorandums of understanding on key projects of capacity and investment cooperation. Among them, the largest amount of project contracted by the two sides “Flowers” falls in Liaoning Province in Northeast China.

The project was signed by Saudi Arabian Oil Company (hereinafter referred to as Saudi Arabian Oil Company), China Weapons Industry Group Limited (hereinafter referred to as Chinese Weapons) and Panjin Xin Honest Industry Group (hereinafter referred to as Panjin Industry). The three parties intend to invest more than 69.5 billion yuan (about $10.9 billion) to establish Huajin Ami Petrochemical Co., Ltd. (hereinafter referred to as Huajin Ami) in Panjin City, Liaoning Province. 。

According to the official website of Saudi Arabia and the United States, Huajin and Ami will become the largest Sino-Saudi joint venture in history, with commercial operation expected in 2024.

After the completion of the project, Chinese weapons will hold 36% of Huajin Amy, 35% of Saudi Amy and 29% of Panjin Industries.

Huajin Ami project covers an area of 598 hectares. It plans to build an annual refining capacity of 15 million tons (300,000 barrels per day), ethylene production capacity of 1.5 million tons, and PX production capacity of 1.3 million tons, with the goal of becoming a world-class integrated refining and chemical base.

Amy Nasser, Saudi Arabia’s CEO, said the project clearly illustrated the company’s strategy: China and Saudi Arabia can make significant investments in China in order to promote China’s economic growth and development from the previous relationship between buyers and sellers in the petrochemical field.

Seventy percent of the crude oil will come from Saudi Arabia and the United States in the Huajin A-U.S. joint venture project.

According to Liaoning Daily, the Sino-Saudi joint refining project was approved by the Liaoning Provincial Government in July 2015 and is expected to add 100 billion yuan of sales revenue, 11 billion yuan of profits and 20 billion yuan of tax revenue to the northeast region every year.

Saudi Arabia and the United States cooperate with Liaoning Province in more than refining projects. Nasser said that by the end of 2019, Saudi Arabia Amy, Northern Huajin Chemical Industry Group Co., Ltd. and Liaoning Communications Construction Investment Group will form a tripartite marketing joint venture to jointly develop retail gas station projects in China.

The Huajin Ami project will also greatly enhance the refining and petrochemical production capacity of Chinese weapons.

China Weapons was founded on July 1, 1999, and was reorganized on the basis of the former China Weapons Industry Corporation. In 2018, China’s main revenue in military industry and other fields reached 450 billion yuan, ranking 140th among Fortune magazine’s top 500 enterprises in the world.

At the beginning of 2000, Chinese weapons began to enter the petroleum industry. At present, petroleum business has covered oil and gas exploration and development, crude oil and product oil trade, oil and gas storage and transportation, petroleum refining and liquefied natural gas (LNG), forming a relatively complete industrial chain.

By the end of 2017, China’s weapons had oil and gas exploration blocks in six countries, with geological reserves exceeding 1 billion tons, of which the annual trade volume of crude oil and refined oil reached tens of millions tons. At present, the annual refining capacity of Chinese weapons in Liaoning Province has reached 8 million tons.

In May 2017, China’s weapons signed the Joint Development Agreement with Saudi Arabia, Amy and Panjin Industries to jointly develop the “Fine Chemical and Raw Materials Engineering of Chinese Weapons” project and held a foundation-laying ceremony.

Panjin Industry is a wholly state-owned company funded by the State-owned Asset Management Office of Panjin Liaobin Coastal Economic Zone. It was founded on November 1, 2010 with a registered capital of about 940 million yuan.

China-Saudi Arabia Investment Cooperation Forum was held in Beijing on the day of the signing of the Huajin Ami Project. At the forum, China and Saudi Arabia also signed 35 agreements and memorandums of understanding. According to the rough statistics of interface news, the total amount of the contract is more than $28 billion, involving petrochemical, manufacturing, new energy, communications and other industries. Among them, the investment amount of petrochemical industry is over 17 billion US dollars, accounting for about 60% of the total amount.