Saudi Aramco is negotiating with Sinopec Corp for a stake in a proposed $1.2 billion refinery in eastern China and is eyeing more of such investments, industry officials said.

The Saudi state oil firm aims to seal the deal by end-2005, an official said, which would make it Aramco's second investment in China's protected refining sector and would fit into Riyadh's plan to boost crude sales to the world's No 2 energy user.
In return for guaranteeing crude supply to China, Aramco may get a 20-40 per cent stake in the 10 million-tonne-per-year (200,000 barrel-per-day) plant in Shandong province that is due for start-up in the first half of 2007, industry sources said.
China's top state oil refiner, Sinopec, and local firms backed by the Shandong provincial government would together hold a controlling stake in the project. The provincial government is the driving force behind the plan in its efforts to stimulate the region's agriculture-intensive economy.
Formal discussions kicked off late last year after Sinopec set up a project team in the city of Qingdao, sources said.
'We are evaluating the commercial viability (of Qingdao). This will be part of a long-term partnership with Sinopec. We want to get involved in other projects as well,' an Aramco official said.