Jan. 16, 2012 (China Knowledge) - Saudi Arabian Oil Co (Aramco) last Saturday signed a deal with China Petrochemical Corp (Sinopec Group), the parent company of Sinopec<600028
>, Asia's largest oil refiner, to jointly develop a large refining project at Yanbu, on the coast of the Red Sea in western Saudi Arabia.
The state-owned Saudi Arabian oil giant will hold a 62.5% stake in a proposed joint venture, named Yanbu Aramco Sinopec Refining Co (YASREF), while Sinopec Group will have the remaining 37.5% stake.
The Yanbu project, which is expected to start operation in 2014, is designed to have a crude oil output capacity of 400,000 barrels per day.
Aramco CEO Khalid al-Falih said total investment of the refinery would reach around US$8.5 billion if the capital is provided by the two partners. However, the investment would reach US$10 billion if the funds are borrowed.
China imports approximately one fifth of crude oil from Saudi Arabia, Falih added.
In the same refining project, U.S.-based oil supplier ConocoPhillips withdrew last year due to assets spin-off.
Aramco has also teamed up with Sinopec Group to jointly develop a gas project in the southeastern area of Saudi Arabia.