Abu Dhabi will double its oil exports to China over the next two years as it expands its energy relationship with the world's second-largest economy.
China an increasingly important economic partner for Abu Dhabi
Abu Dhabi will double its oil exports to China over the next two years and has signalled it could expand the energy relationship.
That comes two years after China, the world's fastest-growing oil market, became the biggest buyer of Saudi crude.
"I expect more demand to come from China and India," Sultan Al Muhairi, the marketing and refining director of the state-owned Abu Dhabi National Oil Company (Adnoc), told Bloomberg News in Seoul shortly after the UAE's latest deal with China was announced this month.
Abu Dhabi has sent its oil east for decades. In 1972, Japan became a partner in an Abu Dhabi oil concession, and this year it won a 30-year extension in three oilfields and rights to drill at a new one.
Abu Dhabi has also promised South Korea the right to develop one or more fields holding at least 1billion barrels of oil.
The South Korean utility Kepco won a US$20 billion (Dh73.45bn) contract in 2009 to build Abu Dhabi's first nuclear power plant, which is expected to come online by 2017.
The emirate's relationship with China is still taking shape.
Abu Dhabi has committed to doubling its exports to China from just under 100,000 barrels per day (bpd) to 200,000 bpd starting in 2014, and Mr Al Muhairi hinted that the partnership could grow beyond that.
That is part of a strategy at Adnoc to focus on business with the fastest-growing economies. China's demand is forecast to grow by 6 per cent this year, a 570,000 bpd increase over last year's 9.3 million bpd, according to the International Energy Agency.
In the past, China has relied on oil from politically risky countries such as Sudan and Angola. But to fuel its rapid industrial growth, it has cultivated relationships with older, more stable producers in the Gulf.
In 2009, China sent its first cargo to a refinery built in China's Fujian province as part of a $5bn joint venture with ExxonMobil and Sinopec. This year, Saudi Aramco, the world's biggest oil producer, agreed to build two refineries with Chinese national energy companies. "We don't consider ourselves simply sellers of oil to China but rather strategic partners," Khalid Al Falih, the chief executive of Saudi Aramco, said when the deals were struck in March.
Abu Dhabi's relationship with China has yet to reach that scale, although China has partnered Abu Dhabi on strategic projects.
In 2007, China National Petroleum Corporation, one of the country's three largest state oil companies, secured a $3.2bn contract to build a strategic pipeline from Abu Dhabi to the Fujairah coast on the Gulf of Oman. Today that pipeline allows half of the capital's oil to bypass the Strait of Hormuz.