Saudi Arabia and China oil depot project between in the southern province of Hainan has been suspended
A 20-million-tonne oil depot project between Saudi Arabia and China in the southern province of Hainan has been suspended, due to hesitation on the Saudi side, an official with the Hainan provincial government told Interfax on Thursday.
In the run up to an official visit by Saudi King Abdullah speculation has been rife as to the future of the deal.
"We have reached a general cooperation memorandum at the end of 2002, however the Saudi side has neither recommended any specific Saudi investors nor paid a visit to Hainan yet, which seems that they do not have any sincerity," an official with Hainan Provincial Development and Reform Commission said, who requested to remain anonymous.
The Saudi royal family and the Hainan Haikou Gaofeng Oil Refinery Corporation agreed to establish a 6-million tonne oil refinery project and a 20-million-tonne oil depot in the memorandum, said the official.
"Saudi's slowing down its plans in Chinese oil market is mainly because of the Chinese government's hesitation about reform of the industry," Li Guohong, a senior energy expert with Beijing based Yinhe Securities, told Interfax.