China and Saudi Arabia have signed preliminary deals that could be worth as much as $65b if finalized. The news came on the first day of a four-day visit by Saudi King Salman to China, according to Oil Price.
One of the preliminary agreements envisages the joint development of downstream and petrochemical projects in China with state – local North Industries Corporation.
Additionally, the deal will see Saudi basic Industries Corp. and Sinopec work on petrochemical projects both in China and Saudi Arabia. The two already have a joint project – a refinery in Tianjin in northeastern China.
As informed by The Economic Times, Beijing is rolling out a massive trade and investment initiative across Central Asia and the Middle East called “One Belt, One Road” and sees the desert kingdom as a regional linchpin.
Furthermore, China is a crucial market for Saudi oil, and the king’s visit is widely seen as an attempt to secure future exports, preferably under long-term contracts, which is the standard approach of the Kingdom toward crude oil exports.