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On Saturday Saudi Aramco and Sinopec Group signed a landmark $8.5 billion deal to develop an ultramodern, highly sophisticated, full-conversion oil refinery in Yanbu; known as YASREF (Yanbu Aramco Sinopec Refining Co. Ltd). Production is forecast to begin half way through 2014 at 400,000 barrels of heavy crude per day. Saudi Aramco will hold a 62.5 percent stake in the plant while Sinopec Group will own the remaining 37.5 percent.
Sinopec is owned by the China Petrochemical Corporation, the country’s largest refiner, and can bring technical and commercial expertise to the partnership, whilst Saudi Aramco adds value with its unparalleled strengths in resources, management and host advantage.
“This is the fourth joint venture between our two enterprises,” said Al-Falih. “YASREF takes its rightful place next to our two downstream companies in China’s Fujian Province, and our in-Kingdom upstream joint venture, Sino-Saudi Gas Ltd.,” he said and proudly pointed out that Sinopec was Saudi Aramco’s largest crude oil customer.
Saudi Arabia continues to remain a fantastic destination for foreign investment. “YASREF stands as a testament to the sound climate for foreign direct investment in Saudi Arabia, and it is yet another indicator of the attractive business opportunities this nation has to offer strategic investors,” he said. As Al-Falih pointed out, the latest joint endeavour is simply the most recent chapter in a long story of cooperation, collaboration and trade between the Arabian Peninsula and China.
Fu expressed delight at the agreement. “This is a milestone on the journey of cooperation between our two companies,” he said. “We trace our relationship back to the early 1990s when we started downstream venture discussions in China; since then Sinopec and Saudi Aramco have developed cross-border cooperation along the hydrocarbon value chain, covering upstream and downstream investment, crude oil trading and engineering services.”