Saudi Arabian Oil Co. (Aramco) has secured agreements with two Chinese language refiners laying the groundwork for potential stake acquisitions that will broaden the Saudis’ downstream footprint in China.
Signed as a part of the go to to the dominion of a delegation led by Premier Li Qiang, the agreements embody “preliminary documentation regarding a Improvement Framework Settlement with Rongsheng Petrochemical Co. Ltd. (Rongsheng) and a Strategic Cooperation Settlement with Hengli Group Co., Ltd.”, Aramco mentioned in a press release.
“The preliminary documentation regarding a Improvement Framework Settlement with Rongsheng is linked to the potential joint growth of an enlargement of Saudi Aramco Jubail Refinery Firm (SASREF) amenities”, mentioned the assertion on Aramco’s web site.
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The brand new settlement between Aramco and Rongsheng advances the Cooperation Framework Settlement they inked April, beneath which they plan to type a three way partnership inside SASREF. The sooner pact supplies for Rongsheng’s potential acquisition of a 50 % stake within the Aramco subsidiary and Aramco’s potential acquisition of a 50 % curiosity in Rongsheng affiliate Ningbo Zhongjin Petrochemical Co. Ltd.
Aramco already holds a ten % stake in Rongsheng, after final yr’s completion of an acquisition deal that sees Aramco supplying 480,000 barrels a day of petroleum from the Gulf state to what it mentioned was China’s greatest built-in refining and chemical compounds plant.
Rongsheng holds a 51 % curiosity within the proprietor of the plant, Zhejiang Petroleum and Chemical Co. Ltd. The plant can course of as much as 800,000 bpd of crude and produce as much as 4.2 million metric tons of ethylene a yr.
In the meantime the opposite settlement signed in the course of the Chinese language delegation’s go to “advances talks regarding Aramco’s potential acquisition of a ten % stake in Hengli Petrochemical Co. Ltd., topic to due diligence and required regulatory clearances”, Aramco mentioned.
“The signing of those agreements reaffirms our perception within the long-term, mutual advantages that may come up from Aramco’s shut collaboration with our Chinese language companions”, Aramco downstream president Mohammed Y. Al Qahtani mentioned. “China is a crucial nation in our world downstream development technique, and we sit up for constructing on a relationship that spans greater than three a long time to unlock new alternatives on this essential market”.
Aramco final yr additionally signed agreements securing talks on its bids to amass pursuits in two extra Chinese language downstream gamers. Aramco plans to have a ten % stake in Shandong Yulong Petrochemical Co. Ltd., as introduced October 11, 2023, and one other 10 % stake in Jiangsu Shenghong Petrochemical Business Group Co. Ltd., as introduced September 27, 2023.
In one other downstream venture in China, Aramco and its companions broke floor March 2023 for the Panjin refining and petrochemicals advanced, as introduced by Aramco Might 9, 2023.
Aramco holds a proper to provide as much as 210,000 bpd of crude oil feedstock to the power, owned by Huajin Aramco Petrochemical Co. (HAPCO), the place Aramco has 30 % possession. The advanced is anticipated to be totally operational by 2026.
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