Saudi oil giant bets on China’s clean energy future with major downstream investments

Saudi Aramco is significantly enhancing its strategic partnership with China, its largest crude oil customer, by shifting focus towards petrochemicals and low-carbon solutions.

Saudi Aramco, the world’s largest oil and gas company, is intensifying its partnership with China, aiming to deepen collaboration in petrochemicals and low-carbon technologies, Caliber.Az reports citing the foreign media.

This move aligns with Aramco's strategy to diversify its business and support China’s net-zero emissions goals, given that China is the world’s largest emitter of greenhouse gases.

“Our relationship with China has evolved beyond crude oil sales to become a broader, strategic partnership,” Mohammed Al Qahtani, Aramco’s President of Downstream, told the Post in an emailed interview. “We are committed to enhancing China’s long-term energy security while seeking mutually beneficial opportunities to develop a world-leading integrated downstream sector in China, focusing on high conversion of liquids into chemicals.”

Aramco plans to significantly invest in China’s integrated downstream sector, covering oil supply, refining, chemicals, and lubricants. The company aims to lead in the conversion of liquids to chemicals and provide reliable, lower-carbon intensity oils.

Saudi Aramco, the world’s largest oil and gas company, is strengthening its partnership with China, its largest customer, to advance in petrochemicals and low-carbon technologies. The Dhahran-headquartered firm reports that China purchases about 90 million tons of crude oil from them each day.

China aims to peak carbon emissions by 2030 and achieve net-zero by 2060, as outlined in the Paris Agreement goal of limiting global warming to 1.5 degrees Celsius. Aramco has set a parallel objective to reach net-zero emissions by 2050.

Aramco is leveraging China’s push towards clean energy, anticipating a rise in demand for petrochemical materials such as plastics, crucial for solar panels and batteries, as noted by CEO Amin Nasser during a recent earnings call.

In line with these goals, Aramco is pursuing opportunities to co-develop advanced emission reduction technologies and invest in downstream projects to support China’s carbon-neutral aspirations. This includes efforts in heavy transport, alternative technologies, carbon capture, and storage.

In 2022, Aramco, in collaboration with the China Building Materials Academy, launched Nexcel, an innovation center focused on developing eco-friendly materials for the construction sector. These materials aim to reduce the carbon footprint of conventional building practices and have been applied in infrastructure projects like roads and buildings.

“Our collaboration with Chinese partners on emission reduction technologies is pivotal,” said Mohammed Al Qahtani, Aramco’s President of Downstream. “Our investments not only expand our downstream presence but also support our transition to liquids-to-chemicals, fostering growth through the integration of refining and petrochemical processes in a key market.”