Saudi Aramco president and CEO Abdullah S. Jum'ah and Sinopec Group President Chen Tong Hai signed here yesterday a Memorandum of Understanding (MOU) to enhance the strategic commercial partnership between the two companies. In the MOU, Sinopec and Saudi Aramco re-emphasized their mutual interest in continuing to explore opportunities to expand their long-term business relationship, and to move forward with their joint efforts on a commercial basis. The MOU focuses on commercial and technical aspects of the companies' collaboration in the areas of crude oil treating and commercial storage, natural gas exploration and production, petroleum products and petrochemicals derivatives. The MOU also covers the two ongoing joint developments in China, the Fujian Refining and Ethylene Project (in which affiliates of Saudi Aramco, Sinopec and ExxonMobil are potential equity partners) and the Qingdao Refinery Project (in which affiliates of Saudi Aramco and Sinopec, along with the local provincial and municipal governments, are potential equity partners). Saudi Aramco and Sinopec agreed to establish the Fujian Ethylene Joint Venture and the Fujian Marketing Joint Venture during 2006 and agreed that the Refining and Ethylene Integrated Project will begin production by early 2009. Regarding the Qingdao Refinery Project, the parties agreed to further their joint efforts to reach agreement on terms for Saudi Aramco's participation in the Project and to meet the plant's on-stream date of 2008. The MOU stipulates that Saudi Aramco is committed to supplying Sinopec and its affiliates 1 million barrels per day of Arabian crude oil by 2010.
