China and Adnoc key partners in energy sector
China is already one of the largest foreign investors in Abu Dhabi’s energy industry, with investments parked in the upstream sector, both in onshore and offshore concessions.
Chinese firms, which picked up $1 billion worth of stakes offshore Abu Dhabi in March alone, are expected to expand their involvement to also include the downstream sector.
State-owned Abu Dhabi National Oil Company, which produces about 4.5 per cent of the world’s total crude output, in May unveiled its plans to build the world’s largest refining and chemicals facility in the suburb of Ruwais in Abu Dhabi, where it intends to invite global energy companies to set up base.
China, which is one the biggest consumers of crude-derived products to manufacture plastics, compounds and chemicals that find use in various industrial and commercial activities, could naturally play a part in the UAE’s expanding downstream sector.
Adnoc has made known its intentions to offer partnerships downstream similar to its awarding of stakes in the upstream sector earlier this year.
China, which is looking at greater involvement in Middle East states as part of its Belt and Road Initiative, is looking to plough in more investment into infrastructure developments in the region, as it eyes lucrative deals to secure affordable and stable energy sources.
Beijing has already laid work to complete part of this energy-focused value chain. The China Pakistan Economic Corridor, which involves billions of dollars of investment to create a pathway of infrastructure development, includes pipelines that will allow for easy offtake of Middle East crude via the Pakistani port terminal of Gwadar.
Gas will figure high on the agenda as China looks to consume more of the fuel, which it looks to use in transition as the Asian country builds more renewables capacities for a greener growth trajectory.
With the UAE, through Adnoc, playing a more international role in the oil markets, the three-day visit of President Xi Jinping starting today is set to open up several pathways for energy investments by both partners .
several pathways for energy investments by both partners.
Updated: July 18, 2018 08:01 PM