BEIJING, Dec. 2 (Xinhuanet) -- Exxon Mobil Corp., the world’s biggest publicly traded oil company, and Saudi Aramco started engineering work on a US$3.5 billion refinery in China’s southern Fujian Province, a Saudi official said.
“We have begun some basic engineering work on the refinery," Abdulaziz al-Khayyal, Saudi Aramco’s senior vice president of refining and oil marketing, said. “We expect to sign a final joint venture agreement by next year."
Exxon, Aramco and China Petroleum & Chemical Corp. plan to expand the refinery to process 240,000 barrels of oil a day from 80,000 barrels a day. Exxon and its partners are also building chemical plants, including an 800,000-ton-a-year ethylene plant among other chemical units.
Saudi Arabia, the world’s biggest oil exporter, is investing in oil refineries to secure outlets for its crude oil exports, half of which are consumed in Asia. The kingdom may expand its oil output capacity by 14 percent to ease concern of shortages as demand rises in China and other markets.
China passed Japan as the world’s second-largest oil consumer last year, after the United States. It will need more than 10 million barrels of crude a day by 2030, up from 6.3 million now, according to the International Energy Agency, an adviser to 26 industrialized nations. China’s crude imports rose 34 percent in October as domestic production failed to keep up with soaring demand.
Saudi Arabia was the second-largest overseas supplier of crude to China in October after Angola, supplying the Asian country with 1.5 million metric tons (10.6 million barrels), Beijing-based Customs General Administration said this month.
Saudi Aramco wants to invest in Asia and elsewhere to expand its market share. The company has holdings in refineries in the United States, Japan, Greece, the Philippines and South Korea that process close to 2.3 million barrels of oil a day into fuels.
"We are looking to invest in other refineries with other partners, but we have a higher priority in the Far East because that's where the growth is," al-Khayyal said.