Sinopec-Saudi refinery deal to boost Aramco foothold in China

BEIJING (XFN-ASIA) – China Petroleum & Chemical Corp (Sinopec) is expected to sell a 25 pct stake in an east China refinery to Saudi Aramco in a deal that analysts said will give the Saudi company a major boost in China’s fast growing market.

They also said the tie-up with Aramco at a refinery under construction in Qingdao will allow Sinopec to limit some supply-side risks posed by the OPEC production quota.

‘In terms of supply security for Sinopec, there is a big advantage there,’ said Argus Media oil analyst Jason Feer, adding that Saudi Arabia will give its own refining ventures priority in sales of crude oil.

‘They (Saudi Arabia) would reduce volumes to other listers and keep their own volume fairly steady because they would lose money by shutting off volume to themselves,’ he added.

Forbes