Saudi Aramco Opens Head Office in Beijing

State owned Saudi Arabian Oil Co., or Aramco, has opened a new Chinese head office in Beijing, deepening its presences in one of the world's largest energy consumers, in a move the company says "underscores the strategic importance of Asia" in its operation.

Aramco Asia, a solely-owned subsidiary of Aramco, opened on Monday and will serve as the business and cultural exchange portal between Aramco and China . The new head office in Beijing has two supporting branches in Shanghai and Xiamen , it said.

"Our new Asia office here in Beijing will be a hub for facilitating our joint activities in general and in particular investment and other business opportunities arising from the capital projects in Saudi Arabia and Asia ," said Aramco Senior Vice President Abdulrahman F. Al-Wuhaib at the Aramco Asia inauguration ceremony on Monday in Beijing .

The new offices will provide crude oil and chemicals marketing services, joint venture coordination, procurement, inspection, research and development, project management, human resources development and communications in the region, according to the press release.

Aramco already has two joint ventures in China with China Petroleum & Chemical Corp (SNP), or Sinopec Group, and ExxonMobil Corp. (XOM). It holds a 22.5% stake in retail oil products distributor Sinopec SenMei Petroleum Company, and a 25% stake in the Fujian Refining & Petrochemical Company, which operates a 240,000 barrel-per-day refinery. The province of Fuji also has a 25% stake in the operation.

Saudi Aramco is also planning to sell chemical products from FRPC to tap in to China 's lucrative chemical market, the press release said.

Separately, Aramco is developing a 400,000-barrel-a-day refinery in Yanbu on the Saudi Red Sea coast together with Sinopec. Aramco will own 62.5% stakes in the project. ��:lHe{�Uynsi-language:EN-GB; mso-fareast-language:EL;mso-bidi-language:AR-SA'>, bypassing Ukraine , aims to be operational by 2015. It will deliver 63 billion cubic meters of gas a year, representing about 14% of EU consumption.

Gazprom is already operating another pipeline, called Nord Stream, which runs under the Baltic Sea and will eventually be able to deliver 55 billion cubic meters a year of gas into northern Germany .

Analysts say the asset swap lets Gazprom store gas closer to its customers in Europe . "It will facilitate gas sales to Europe and make the market more stable," said Sberbank Investment Research's Valery Nesterov.

More stable supply will likely lead to fewer big moves in gas prices, and "protect Gazprom from criticism over gas pricing and unevenness in supply that it has come under in the past," Mr. Nesterov said.

The BASF deal comes as Gazprom is subject to an antitrust probe by the European Commission into whether it has broken antimonopoly rules by imposing unfair gas prices through contracts linked to oil prices, or prevented countries from diversifying their gas supplies. Gazprom denies these charges.

The deal is subject to approval by regulators and the companies said in a joint statement they expect it to be completed by the end of 2013.