U.S., Saudi, Chinese Firms Announce $5 Billion Deal

April 1, 2007
Exxon, Aramco and Sinopec will operate 750 service stations and a refinery in China.

Exxon Mobil, Saudi Aramco and Sinopec announced on March 30 two joint ventures worth about five billion dollars to operate 750 service stations and a petrochemical refinery in China. The announcement marked the culmination of 12 years of preparations, according to Exxon.

"It's our biggest project so far in China," Sarah Du, a Beijing-based Exxon Mobil spokeswoman said. In a joint statement, the companies called the two joint ventures "the first fully integrated refining, petrochemicals and fuels marketing project with foreign participation in China."

The refining joint venture, which will start operations in early 2009, will expand one that already existed in the southeastern province of Fujian between Sinopec and the Fujian government. It will lead to a tripling of the production of refined Saudi Arabian crude to 240,000 barrels per day.

A joint venture co-owned by Sinopec, China's top refiner, has a 50% stake in the venture, while Exxon Mobil and Saudi Aramco each have 25%.

The second joint venture will operate some 750 service stations and a network of terminals across Fujian province. Sinopec holds a 55% stake in the service station venture, with Exxon Mobil and Saudi Aramco each holding 22.5%.

The partnership, which aims to meet China's rapidly growing demand for petroleum products and petrochemicals, also includes a long-term crude supply agreement with Saudi Aramco.

According to OPEC, Saudi Arabia regained its status title as China's top source of imported crude oil in August. Angola had occupied the position since February.

Copyright Agence France-Presse, 2007

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