China's Hu visits Saudi SABIC as $5.2 bln deal eyed

RIYADH, Apr 22 (Reuters) Saudi Arabia's SABIC said plans to build an oil refinery and ethylene plant at Dalian in northeast China were on track, after Chinese President Hu Jintao visited the industrial giant's headquarters on Saturday.

''It's a refinery and petrochemical complex in which we will be responsible for the petrochemical aspect and the Chinese will do the refinery,'' SABIC chairman Prince Saud bin Thunayan Al-Saud told reporters after talks with Hu, who arrived in the booming oil producing country after touring the United States. ''It's about .2 billion in cost, and if it is finalised it will be a major investment,'' Prince Saud said.

A source at SABIC (Saudi Basic Industries Corp.) said SABIC's share of the .2 billion deal had not yet been finalised.

''It's down to the Chinese to decide. We're waiting for the Chinese to formally react,'' he said.

Hu is on a three-day state visit to Saudi Arabia that underlines how important the kingdom and its oil are for China's fast-growing economy.

Saudi Arabia was China's top oil supplier in 2005, providing 17.5 percent of its imports with 443,600 barrels per day (bpd).

The source at SABIC placed the group's current expansion projects, excluding the Dalian Shide project, at between billion and billion.

Hu, who said on arrival that he wanted to deepen cooperation with Saudi Arabia, was accompanied at SABIC headquarters by Saudi Oil Minister Ali al-Naimi.

Naimi and SABIC officials were part of a large delegation headed by King Abdullah that visited China in January in a drive to develop Saudi Arabia's trade links with rising Asian economies and diversify from traditional U.S. ties.

Chinese sources have said SABIC was in talks with Sinopec, China's top refiner and petrochemicals producer, over a separate 1 million tonne-per-year ethylene plant. SABIC has declined to comment on the reports.

SABIC, the world's most profitable petrochemical firm, has in recent years looked at investing in China's fast-expanding petrochemical sector but has yet to land a concrete deal.

REUTERS KD PM2317