Page 6 - AsiaElec Week 13 2021

AsiaElec COMMENTARY AsiaElec

China’s green ambitions

attract Aramco

The Chinese government’s crude oil consumption and carbon emission projections have
driven the Saudi oil giant to widen its net of opportunities

CHINA SAUDI Arabia is positioning itself as China’s teamed up with Chinese universities and com-
energy partner of the future, building relation- panies to develop both cleaner engines and low-
WHAT: ships that it hopes will create growth opportuni- er-emissions petrochemical technologies.
Saudi Aramco has ties even as Chinese oil demand peaks. “In fact, we have even bolder ambitions to
pledged to ensure Chinese President Xi Jinping announced expand and intensify our research collaboration
Chinese energy security in September 2020 that the country aimed to with China,” Nasser said. He noted additional
over the next 50 years. become carbon neutral by 2060, with emissions collaboration was also likely on blue hydrogen,
peaking before 2030. While his announcement, ammonia and carbon capture technologies.
WHY: made while virtually attending the UN General Aramco’s stated desire to expand its down-
Aware of the country’s Assembly in New York, was met with some scep- stream presence and focus on petrochemical
energy transition, the ticism at the time, the National People’s Congress opportunities make sense, given past interest in
developer wants to tap (NPC) outlined the country’s emissions reduc- the country’s refineries.
into old and new energy tion commitment earlier this month. While the Saudi oil giant last year pulled out
investment opportunities. At the end of its week-long annual meeting, of state-run Norinco’s planned 300,000 barrel
the NPC formalised the country’s 14th Five Year per day complex in Liaoning Province, Aramco
WHAT NEXT: Plan (FYP, 2021-2025), which set out an 18% already owns 25% of the Sinopec-led 280,000
Aramco is looking beyond reduction target for “CO2 intensity” and 13.5% bpd Fujian refinery and agreed in 2018 to buy
oil and gas supplies to reduction target for “energy intensity” by 2025. 9% stake of the privately owned 800,000 bpd
new opportunities such Understanding the shift in the priorities of ZPC refinery.
as hydrogen. the world’s largest oil and gas importer, state-run Such ambitions are not without their hur-
Saudi Aramco pledged late last week to meet the dles, however. Not only has state-owned China
Asian giant’s energy needs over the next 50 years. National Petroleum Corp (CNPC) projected
While Aramco noted that oil and gas would that oil demand will peak within the next four
continue to play a key role in China’s energy mix years, but the country is witnessing an ongoing
over the next half century, it added that it would push for downstream consolidation amid surg-
work with Beijing on a range of emission reduc- ing overcapacity that could limit investment
tion and clean-energy technologies. The move is opportunities.
an acknowledgement by the Middle Eastern oil
producer that it needs to adapt to fundamental Peak demand
shifts in the global energy demand profile. CNPC’s oil research arm predicted in Decem-
ber 2020 that the country’s annual oil demand
Aramco ambitions would peak at 730mn tonnes (14.66mn bpd)
Aramco CEO Amin Nasser told the China by around 2025. It expects total primary energy
Development Forum on March 21 that China’s consumption to peak at 5.6bn tonnes of standard
energy security would remain his company’s coal equivalent by around 2035.
highest priority over the next half century. CNPC has projected that natural gas demand
“Ensuring the continuing security of China’s will climb by around 2.8% per year over the next
energy needs remains our highest priority – not two decades, peaking at 550bn cubic metres by
just for the next five years but for the next 50 and around 2040. The shift to improve energy effi-
beyond,” Nasser said. “We appreciate that sus- ciency and boost supply of clean energy sources
tainable energy solutions are crucial to a faster will likely see coal consumption begin to fall
and smoother global energy transition ... But from 2025 to 2.9bn tonnes in 2035 and just
realistically, this will take some time, since there 900mn tonnes in 2050.
are few alternatives to oil in many areas.” China’s largest oil and gas producer has also
Nasser said Aramco was also looking for fur- predicted that new energy vehicles (NEVs) will
ther downstream investment opportunities in account for more than 30% of the country’s
order to meet Chinese demand for heavy trans- active vehicles by 2035, 50% by 2040 and nearly
port, chemicals, lubricants and non-metallic 80% in 2050. NEVs include electric vehicles
materials. The executive said his company had (EVs), plug-in hybrid and hydrogen vehicles.

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