Saudi Arabia looks to deepen energy cooperation with China
Saudi Arabia is seeking to diversify its energy production and diplomatic relations in partnership with China
Saudi Arabia and a major Chinese wind turbine manufacturer are close to a deal to develop a new renewable energy plant in the kingdom, Bloomberg reported on 15 July.
The deal comes as Riyadh continues to seek to diversify its economy beyond oil production, localize supply chains, and expand economic ties with China.
Bloomberg reports that the Saudi sovereign wealth fund and Vision Industries, a privately owned renewable-energy manufacturing company, may sign an agreement with Envision Energy Co, a Chinese multinational corporation headquartered in Shanghai, as soon as this week.
Envision already has significant business in Saudi Arabia. The Chinese firm supplies wind turbines for the almost $9 billion NEOM Green Hydrogen Co, which will use solar and wind power to create hydrogen for electricity production.
The NEOM hydrogen plant is expected to produce 600 tons of carbon-free hydrogen daily by 2026, enough to power around 20,000 hydrogen buses.
It also plans to produce 1.2 million tons of ammonia yearly for global export. The company will have a special pier for shipping the hydrogen as ammonia directly from its site.
Saudi Arabia has expanded its economic and diplomatic ties with China significantly in recent years, as Beijing has become Riyadh’s largest buyer of Saudi crude.
CNN reported in March last year that Saudi Arabia and other West Asia nations are choosing to “diversify their global partnerships.”
“The traditional monogamous relationship with the US is now over,” said Ali Shihabi, a Saudi analyst and writer. “And we have gone into a more open relationship; strong with the US but equally strong with China, India, [the] UK, France and others.”
The polarization between the US and China is the reason different parties “bring different forms of influence to the table,” he told CNN. “The smart thing for the kingdom is to put in place a portfolio of strategic relations that all contribute to its security and prosperity in different ways.”