Aramco | China
Celebrating 30 years of trade with China
Aramco shares with China an ingrained connection of energy cooperation, noteworthy downstream investments, research, and meaningful relationships.
Saudi Arabia and China are nations of international trade.
Along famed ancient trade routes, traversing both countries’ wide mountain, desert and sea horizons, goods and ideas have been exchanged for centuries.
Today, China is one of the world’s fastest growing economies, while the Kingdom is the leading producer and exporter of some of the world’s finest crude oil — a clearly mutually-beneficial trade connection.
China is Aramco’s biggest customer, and we are China’s largest supplier of oil, delivering almost 17% of its oil imports in the first half of 2021.
Yet, our relationship goes much deeper than that of a buyer and seller.
30 years of Arabian oil sales
The Chinese economic dragon rose up from its slumber in the late 1970s, and Aramco’s first shipment of Arabian oil sailed from Ras Tanura to China in October 1991.
Since then, Aramco has steadily increased the supplied volume of not only crude oil but also LPG and other products, and our Chinese customers now include all major refiners and petrochemical players, both state-owned and private.
Three decades later, China’s remarkable global commercial growth has transformed the lives of its people, and Aramco’s safe supply of reliable energy has been an important contributor to this inspiring achievement.
China was the only major country to record economic growth in 2020, and during the COVID-19 pandemic, Aramco continued to meet China’s energy needs without delay or interruption.
Aramco shares with China an ingrained connection of energy cooperation, noteworthy downstream investments, research, and meaningful ties between people.
First foreign participation
China fast became one of Aramco’s most important markets in both refining and petrochemicals. Significant manufacturing and marketing arms were created in China when a company subsidiary signed two joint ventures in 2007.
The equity venture with Fujian Refining and Petrochemical was China’s first fully integrated refining and petrochemicals venture with foreign participation, and tripled the refining capacity of an existing refinery from 80,000 bpd to 240,000 bpd, as well as adding petrochemical production units, and a crude oil terminal.
An agreement with Sinopec SenMei (Fujian) Petroleum saw wholesale and retail fuels marketed to customers in Fujian Province and distributed from about 1,000 retail sites in nine cities via a network of 17 terminals across the province. Another joint venture with Sinopec led to the Yanbu Aramco Sinopec Refining Co, located in Yanbu, Saudi Arabia, which produces premium transport fuels, and high-value refined products.
Chinese investment in Saudi
The two countries’ signature development programs — China’s Belt and Road Initiative and Saudi Vision 2030 — have seen Sino-Saudi relations grow Chinese investment and contracting in Saudi Arabia.
China, an important market for the supply of materials and services, is also a partner toward Aramco’s In-Kingdom Total Value Add (IKTVA) program to localize 70% of expenditure, facilitate exports and job creation.
In China, Aramco has worked with many Chinese semi-government organizations promoting business abroad like China Overseas Development Association (CODA), Tianjin Economic-Technological Development (TEDA) Investment Holding and the China Chamber of International Commerce to promote iktva investment opportunities and attract Chinese investors.
Climate change
While modern humanity will continue to need oil for the foreseeable future, balancing economic goals with environmental restoration and protection is a priority the world shares more than ever before. Both China, one of the largest oil consumers, and Aramco, one of the largest oil producers, both play a key role toward creating the conditions for sustainable economies with the least environmental impact.
Not all oils are equal, and when Chinese customers choose Arabian oils, they are making a wiser environmental choice.
Arabian oils have desirable high gravity scales, one of the lowest upstream carbon intensities in the industry, and are highly compatible with most refineries globally.
China is Aramco’s biggest customer, and we are China’s largest supplier of oil, delivering almost 17% of its oil imports in the first half of 2021.
Lower carbon solutions
To advance sustainable transport, Aramco’s Beijing research center has partnerships with Chinese universities and automotive manufacturers to advance sustainable transport, and the company is keen to share with China its recent developments in cleaner fuels, which meet Euro 5 spec.
With SABIC now part of Aramco’s global enterprise, there is scale, strategy, and an expanding mix of new and existing products to deliver the practical solutions China needs for a carbon conscious world, such as the company’s direct crude-to-chemicals conversion technology.
The cutting-edge technology, currently being piloted in Beijing, eliminates or streamlines several intermediate steps, resulting in chemicals with a lower environmental footprint.
Aramco has also signed an MoU with a Chinese partner to establish in Beijing a center of excellence for non-metallic and advanced composite materials, which have advanced qualities over traditional construction materials, such as steel.
People connections
Common understanding of culture is key to successful business partnerships.
Aramco sponsored its first batch of university students to study in China in 1998, and today the company has more than 80 Saudis who are Chinese university graduates and fluent in Mandarin, some of whom currently work in various roles in China, while at its Asia’s headquarters in Beijing, 90% of employees are Chinese.
Among Aramco Asia’s citizenship programs are providing better educational and health opportunities for underprivileged children living in remote areas, environmental protection and disaster relief.
As Aramco and China continue to grow together, both recognize the urgency to balance economic, social and environmental goals.
Sustainability is at the heart of the new trade route travelled by Aramco and its Chinese partners.