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Beijing, Riyadh anchor energy and security ties

Atul Aneja

Saudi Arabia agrees to set up strategic oil reserves in China

DUBAI: China and Saudi Arabia have anchored their energy and security partnership by signing several agreements that cover the oil and gas sector, trade and defence.

Both sides on Saturday signed an agreement that would expand China's on-going cooperation in the energy sector, in the presence of visiting Chinese President Hu Jintao and Saudi Arabia's King Abdullah bin Abdulaziz. The Chinese energy firm, Sinopec is already prospecting for natural gas in the 40,000 sq km Rub Al-Khali desert zone. It is also partnering the Saudi oil giant Aramco in building a refinery in the Fujian province. Two joint venture oil refineries are being planned in Qingdao and Dalian in northeast China.

According to an AFP report, Saudi Arabia has agreed to set up strategic oil reserves in China following talks between Mr. Hu and King Abdullah. The reserve was likely to be set up in a coastal city in southeast China, and would be used by Beijing in case of an emergency.

Mr. Hu has decided to visit Saudi Arabia, within three months of King Abdullah's visit to China and India, where he was the chief guest during the Republic Day parade.

The two sides also signed a security cooperation agreement involving their Interior Ministries. China has been countering rebels from the Uyghur Islamic community in its Xinjiang province, many of whom were trained along with their counterparts from other countries, including Saudi Arabia, in Afghanistan.

Saudi Arabia's Arab News has reported that a contract on a "defence system" has also been signed. In the past, Saudi Arabia has received CSS-2 "East Wind" intermediate-range missiles from China. Saudi Arabia's Prince Khaled ibn Sultan, assistant Minister of Defence and Aviation, and the chairman of China North Industries Group signed this agreement.

Analysts point out that the Chinese President's visit acquires enormous political significance. Saudi Arabia is the world's largest oil producer and is a key leader of the Arab world. By building a close relationship with China, Riyadh is substantiating its "look east" policy and expanding its foreign policy options.

China, on its part, has begun to find its niche in the resource rich Gulf, where American influence has so far been predominant.

Mr. Hu's visit is likely to see the entry of Chinese health workers in Saudi Arabia.

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