BEIJING (Reuters) - Chinese defense conglomerate China North Industries Group Corp (Norinco) has signed a framework agreement with state-run oil company Saudi Aramco [IPO-ARMO.SE] to build a refinery and chemicals complex in northeast China, industry and government officials said on Tuesday.
The planned projects — including a 300,000 barrels per day refinery and an ethylene complex with annual capacity of 1 million tonnes — are to be built at an estimated cost of 69.5 billion yuan ($10.09 billion), according to one industry official with knowledge of the agreement.
The framework pact, which follows a memorandum of understanding in March, marks one of the high-profile agreements signed during China’s Belt and Road Forum, the first summit under President Xi Jinping’s ambitious plan to promote global trade and investment.
The investment would boost Aramco’s presence in China’s massive refining industry, adding to its 25 percent stake in the Fujian refinery in southeast China operated by state refiner Sinopec Corp.
Aramco could not immediately comment on the report and a Norinco representative was not immediately available for comment.
Norinco, the state defense giant that also runs oil and gas businesses, won regulatory approval in 2015 to build the refinery and petrochemicals complex in Panjin, Liaoning province, Reuters has reported.
Industry analysts have cast doubt over the feasibility of adding a large plant in the region, which traditionally has surplus refining capacity and is far from the main consuming regions.
Reporting by Chen Aizhu; Additional reporting by Reem Shamseddine in Jeddah, Saudi Arabia; Editing by David Goodman