Saudi Aramco expects to raise its refining capacity to eight million barrels per day (bpd) as it increases downstream investments, its chief executive officer said, after signing a $10 billion refinery deal with China's Sinopec Group.

'Over the next decade our total global refining capacity is expected to approach 8 million bpd,' Khalid Al Falih said in a speech at the signing ceremony.

The new figure exceeded a goal Falih cited last year for a 50 per cent increase in capacity to over 6 million bpd. He has said repeatedly that, while other companies are reducing exposure to the refining business, Aramco sees it as a growth industry.

'Let me stress that the various world-class local and international refining and petrochemical investments Saudi Aramco is making are a testament to our firm belief that the downstream remains an attractive and profitable business,' he said yesterday.

At the ceremony, the state-run Saudi and Chinese companies finalised an initial agreement signed last year to develop a 400,000 bpd refinery in Yanbu, on the kingdom's Red Sea coast.

Aramco will hold a 62.5 per cent stake in the joint venture formed to develop Yanbu Aramco Sinopec Refining Company (Yasref), and Sinopec will own the rest.

The cost should be within $10 billion including debt, Falih said. The refinery is due to come on line in 2014.

Other additions to capacity will involve Aramco's investments abroad, plans for new refineries in Jubail and Jizan and the revival of a plan to expand Ras Tanura, already the Middle East's largest refinery, Falih said.

'We will come back to the Ras Tanura expansion within the next decade or so,' Falih said at a Press conference, adding that Aramco had delayed the project when it launched Jizan.

Falih also cited ambitious plans for expansion of its petrochemicals business. The Ras Tanura refinery expansion was to be integrated with a petrochemical complex now being developed in Jubail by Aramco and US Dow Chemical.

'We have said we are going to be a top three petrochemical company ... so we are going to grow by an order of magnitude from where we are today, and it will be a $60 billion business by the time we are done building this petrochemical company,' Falih said.

'It will be global and hopefully the intent is to have it well integrated with our other downstream activities,' he added.

For state-run major Sinopec, parent of top Asian refiner Sinopec, the venture with Aramco is its first refining project outside China, by comparison with PetroChina, which has snatched a string of refinery deals beyond Chinese borders.

'The largest Chinese investment in the kingdom, Yasref, opens a new chapter for Sinopec's overseas operations, helps us gain access to resources and further demonstrates our long-term commitment to meeting growing energy needs globally,' Fu Chengyu, chairman of Sinopec, said.-Reuters