Expanding cooperation

Extending right across the hydrocarbon value chain, Saudi Aramco has pursued significant downstream joint venture development opportunities with Sinopec, Asia's largest refiner.

Fujian Refining and Petrochemical Co is a Saudi Aramco joint venture with Sinopec, ExxonMobil and the Fujian provincial government. Fully operational since 2009, FREP is a refining and petrochemical complex that expanded capacity to 280,000 barrels per day in 2015. The expansion provides most of the petrochemical feedstock needed for the increase of FREP's steam cracker from 800 to 1,100 kilo tons per annum, which was completed early in 2015. FREP is a key element in Saudi Aramco's chemicals strategy and has long been recognized for its outstanding environmental performance by the local community and government.

Another Saudi Aramco-Chinese joint venture is with Sinopec SenMei (Fujian) Petroleum Co, with annual sales of about 6 million tons (47.4 million barrels). SSPC markets gasoline, diesel and illuminating kerosene - produced by its sister joint venture FREP - through 1,000 retail sites in nine cities, via a distribution network of 17 terminals across the province. SSPC was awarded three of the highest safety awards recognized by both Chinese government and industry.

Yanbu Aramco Sinopec Refining Co is a world-class, full-conversion refinery that has been fully operational since the end of 2014. YASREF uses 400,000 barrels per day of Arabian Heavy Crude Oil to produce premium transportation fuels, as well as high-value refined products for both international and domestic markets.

More widely, Aramco Trading Co, a fully owned subsidiary of Saudi Aramco, took its first step into the chemical business by selling Saudi-produced chemical products to Asia. Saudi Aramco witnessed its first direct polymer sales to Chinese customers in 2013. Its chemical sales business in China started realizing profits in 2014. Annual sales of polyethylene and polypropylene in 2015 totaled 375.35 kilo tons per annum.

Today, Saudi Aramco is negotiating further partnerships in China's refining and marketing segments to build on existing ties.

A front runner

Saudi Aramco believes that technology and innovation are the driving forces for continued and future success in the energy sector, and are essential to solving global energy challenges and stimulating the local knowledge economy.

Its Beijing research center was inaugurated in 2015 to expand global reach and facilitate effective partnerships with local research entities, academia and industry, while enhancing research in Saudi Arabia.

The 4,400-square-meter center in Beijing is working on creating cutting-edge solutions to existing exploration and production challenges through innovative thinking and technology. It aims to be a pioneer exploration and production research center that leads the industry in excellence. It is the first global research center in the Asia Pacific region, and employs over 20 researchers, with the goal of expanding to 62 by 2017.

In December 2015, the center organized its first technical forum under the theme of Innovative Geophysical Concepts: New Solutions, which attracted more than 180 professionals from all over China, creating a great platform for technical connection and knowledge sharing.

Complementing its in-house research and amplifying the potential benefits generated by a global research network, Aramco established a corporate venture team in China in 2015. The goal is to support Aramco's corporate venture unit, Saudi Aramco Energy Ventures, to invest in China's startup and high-growth companies with strategically important technologies. It provides support to promising companies in the form of strategic guidance, access to a global network and capital for accelerating the development and deployment of technologies. There is a strong pipeline of candidate companies so far, and the company expects to identify more champions from China.