UPDATE 1-Aramco, Sinopec in revived talks on Qingdao plant

(Adds crude supply background)

FUZHOU, China, Nov 10 (Reuters) - Saudi Aramco is in revived discussions with Sinopec to invest in the Chinese refiner's 200,000 barrel-per-day (bpd) Qingdao refinery in east China, Saudi Aramco's chief executive Khalid Al-Falih said on Tuesday.

Sinopec (0386.HK) said last week that it was hopeful the two sides would reach a deal in what would be Aramco's second refinery investment in China after a $5 billion refinery and petrochemical venture in southeast Fujian province that started up earlier this year.[ID:nPEK166687].

The talks, which began well before the start-up of the Qingdao plant in May 2008, failed to progress partly because of Saudi Aramco's concerns over China's fuel price controls.

But analysts said China's new fuel pricing system in place since January, which more or less warrants a fixed refining margin, provides Aramco with a new lure for investment.

Al-Falih also said it had yet to pin down the timing for supplying 1 million bpd of crude to China, which Sinopec has said would begin next year.

"We have not pinned down the timing, but we are always ready to meet China's demand," Al-Falih told Reuters.

When asked if 1 million bpd was a realistic target, he said: "It depends on how demand in China materialises. Once it materialises, we are ready to supply."

The 1 million bpd figure would be nearly 30 percent more than the actual exports from the Kingdom seen in the first nine months of this year as recorded by Chinese customs.

The world's top oil supplier exported to China roughly 15 percent more crude during the period than a year earlier at 780,000 bpd, customs data showed (O/CHINA1).

The pace was weaker than expected partly due to Saudi reductions on production and slower demand growth in China, the world's No.2 oil market.

(Reporting by Chen Aizhu; Editing by Jacqueline Wong and Jonathan Hopfner)