Sinopec announced on Wednesday that it signed a memorandum of understanding (MOU) with oil giant Saudi Aramco to jointly build a world-class in-depth processing oil refinery in Yanbu, Saudi Arabia, according to the Shanghai Securities Thursday.

Sinopec will initially hold a 37.5-percent stake in the “Red Sea Refining Company” formed to develop the refinery, while its Saudi counterpart will be holder of 62.5 percent of shares in the company.

The cooperation will provide Sinopec with more energy-absorbing channels from foreign countries, and will further safeguard China’s energy supplies, said an industry insider. The partnership is deemed to promote fuel trade cooperation and the development of petroleum and petrochemical value chains.

The project is estimated to be put into operation in 2014, and because of geographical advantages, it will export clean oil productions to countries worldwide.

Yanbu project, which is expected to develop 400,000 barrels-per-day (bpd), accounts for just less than a quarter of Saudi plans to add around 1.7 million bpd of refining capacity to its current 2.1 million bpd.