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Saudi Arabia, Kuwait, Emirates: the BRI makes its way in the Gulf

April 17, 2019


Abstract : The joint initiatives between China and the Persian Gulf countries that have joined the Belt & Road Initiative are multiplying.

MILAN, Apr 15 (Class Editori) – The joint initiatives between China and the Persian Gulf countries that have joined the Belt & Road Initiative are multiplying. "Every year the trade exchanges between the two countries increase, which we expect it will reach 33 billion dollars," said Abdulla Al Saleh, Undersecretary for Foreign Trade of the United Arab Emirates Minister of the Economy, to conclude the Annual investment meeting, AIM, in Dubai where emerged some data on investments in the area linked with BRI.

China and UAE maintain a strategic partnership focused on promoting scientific research in the fields of renewable energy and water, and this cooperation could contribute to increasing bilateral exchanges, which could reach 70 billion dollars by 2020, according to what has emerged to the forum that focused on the various investments and projects associated with the BRI.

Marwan bin Jassim Al Sarkal, the Sharjah Investment and Development Authority executive chairman, representing one of the minor emirates of the seven parts of the UAE federation, further emphasized the importance of BRI, and outlined the role of the emirate in the expansion of economic ties with Chinese investors.

However, the new fact that is still under track is that large Chinese groups active in the infrastructure and construction sector have begun to present strong offers to secure contracts in the many projects underway and planned, in particular, in Dubai and Abu Dhabi, traditionally contracted to Western companies. The case that has caused most concern between the experts is the offer of the China State Construction Engineering Company, Cscec, for the realization of the Dubai Creek Tower, the futuristic project of the Spanish starchitect Santiago Calatrava, on behalf of the Emaar Construction, the most important real estate group in the area.

A second front opened by China in the Gulf is in Saudi Arabia. At the end of March, the two countries started a new petrochemicals JV to carry out the most important project that China has launched with a foreign investor. Saudi Aramco and two Chinese companies, Xincheng Group and China North Industries Corporation (Norinco) will invest 71 billion yuan (10.6 billion dollars) in the city of Panjin, in the northeast of the Chinese province of Liaoning, to build a petrochemical complex that should become operational in 2024, with a refining capacity of 15 million tons of oil and producing 1.5 million and 1.3 million tons of ethylene and paraxylene respectively, with an annual turnover of more than 100 billion of yuan.

"We expect this company to become a world-class petrochemical base in a few years," said Jiao Kaihe, the Norinco chariman.

"This new company is a clear demonstration of the Saudi Aramco strategy, which is trying to move away from the central idea of a seller-buyer relationship to transform itself into a player capable of making significant investments in favor of Chinese economic growth and development", stated Amin Nasser, the Saudi Aramco chairman and CEO, "this project will serve as a model for the cooperation between the Chinese BRI initiative and the Vision 2030 developed by Saudi Arabia".

The three partners signed an agreement in February, which gave Saudi Aramco control of 35% of the JV, while Norinco and Panjin Xincheng have 36% and 29% respectively.

Panjin, a city about 500 km north-east of Beijing, is an important national hub for industry and petrochemicals, where more than 90 companies active in the sector generated revenues of 189.8 billion yuan only in 2018.

Meanwhile, last week 600 buses produced by the Chinese automotive company Anhui Ankai Automobile left Hefei, capital of the eastern province of Anhui, to be delivered to Saudi Arabia.

The 12-meter long buses have three doors and passenger seats arranged in rows of five, and are the Chinese response to the demand for comfort and space from Saudi customers. So far the Chinese company has exported almost 7,000 buses to Saudi Arabia, including school buses and buses for public transport, tourism and pilgrimages, becoming a driving force of the country's transportation system.

A third important front of China in the Persian Gulf is in Kuwait where, in the southernmost area of the desert, the Kuwait New Refinery Project (Nrp) is being developed, launched in collaboration with the China Petrochemical Corporation (Sinopec) and which counts Sinopec Fifth Construction Company between its subcontractors. Once operational, the project should increase the oil refining capacity of the Arab country up to 31.5 million tons per year.

The Chinese company will be responsible for the installation of six crude oil processing plants, worth 519 million dollars.

Wang Zhiwei, project manager of Sinopec Fifth Construction Company, visits the construction sites every day and checks the status and quality of the construction process. Wang has been working on the project for almost three years now, which will lead to the construction of the largest refinery in the Middle East.

"It's not just about the future of Kuwait's oil production, but it's also an excellent opportunity to establish a Chinese brand in the country," said Wang. "We must use innovative concepts, excellence and speed to create a model of Chinese wisdom in Kuwait and therefore in the entire Middle East."

Kuwait was one of the first Arab countries to sign a cooperation agreement with China in the framework of Bri, when the Sinopec Fifth Construction Company, adhering to the principle of "Chinese wisdom", decided to take charge of the Nrp project in 2016.

The main task of the Chinese company, which consists of the installation of six oil refining plants, is part of China's contributions to the development of Kuwait, and therefore for the realization of the development vision defined by the Arab country in the context of Bri.

Wang manages the entire process which includes planning, designing, acquiring of equipment, evaluation of the market, construction of the structures and installation of the plants.

Wang decided to use an innovative technology - the so-called automatic welding process - during the first stages of the project, in order to weld the thick internal walls of the duct. This procedure boosted the productive efficiency of a process that otherwise would be rather expensive in terms of workforce, therefore precision and speed of the construction process are increased.

Not to mention that Wang's decision inspired Sinopec in the design of smart "welding robots", which have already been tested on domestic products after two years of research and development, and which, hopefully, will be employed in foreign projects as soon as possible.

"Let foreigners appreciate our capacity and great skills. After all, here lies the Chinese wisdom," noted Wang.

At the moment, Sinopec Fifth Construction Company is not only aiming at the establishment of a Chinese brand, but also wants to demonstrate quality and speed associated with the "Chinese wisdom", employing more than 6,000 workers for almost 10 hours a day.

Wang has also adopted new technologies to manage the rather complicated data processing operations related to construction, supplies and functioning, creating a data sharing platform that can help reduce cases of repetition in the work process. The strategy has already become a model to which the company refers to in all its overseas projects.

According to the contract, the construction process should be completed by the end of 2019. Despite the slowdowns due to the prohibitive temperatures of Kuwait in summer, which do not allow to work during the day, Wang is certain that the Chinese company's project will go according to plan.

"We have drawn up a rather specific timetable, and at the moment we have reached 78.5% completion. We have a one-year advantage over the remaining foreign contractors involved in the construction of the plant. Everyone will really understand what Chinese speed looks like," said Wang smiling.

"This is the project of the century, not only for Kuwait, but also for the affirmation of Chinese wisdom," he concluded.

(Source:Class Editori)

Notice: No person, organization and/or company shall disseminate or broadcast the above article on Xinhua Silk Road website without prior permission by Xinhua Silk Road.


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