Saudi Arabian Oil Co. (Aramco) and Rongsheng Petrochemical Co. Ltd. signed an settlement Tuesday that brings them nearer to greenlighting a deliberate enlargement venture at a refinery within the kingdom’s port metropolis of Jubail.
Earlier this yr the Saudi oil big and the Hangzhou, China-based firm penned offers towards a possible three way partnership inside Aramco affiliate Saudi Aramco Jubail Refinery Co. (SASREF), which operates the 305,000-barrel-per-day (bpd) refinery.
On Tuesday in Beijing, Aramco, SASREF and Rongsheng Petrochemical inked an settlement that “outlines the cooperation mechanism and planning referring to the design and improvement of the venture, which goals to broaden SASREF’s refining and petrochemical capabilities whereas fostering worldwide collaboration”, Aramco stated in an announcement on-line.
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The announcement comes a day after Aramco and two different Chinese language corporations broke floor for an built-in refining and petrochemical facility within the Chinese language province of Fujian. Aramco has stated China is essential to its downstream development and has been in search of partnerships with native gamers together with by way of stake acquisitions.
“This Growth Framework Settlement underscores Aramco’s intentions to fostering nearer collaboration with key companions and progressing its strategic downstream enlargement, each within the Kingdom of Saudi Arabia and internationally”, Aramco downstream president Mohammed Y. Al Qahtani stated concerning the settlement with Rongsheng Petrochemical. “It additionally highlights the potential of the Kingdom’s downstream sector to draw abroad gamers”.
Rongsheng Petrochemical chair Li Shuirong commented, “Saudi Arabia has considerable power assets and important market potential, and Rongsheng Petrochemical will carry sturdy momentum to the partnership by way of our wonderful operation and administration capabilities and market competitiveness”.
“This collaborative venture not solely has necessary strategic worth for the longer term improvement of each corporations however will even make a contribution to China’s Belt and Street Initiative and Saudi Arabia’s Imaginative and prescient 2030”, Li added.
Presently within the pre-front-end engineering design stage, the SASREF enlargement venture “envisages development of large-scale steam crackers and the mixing of related downstream derivatives into the prevailing SASREF advanced, enhancing its skill to fulfill rising demand for high-quality petrochemical merchandise”, Aramco stated.
On Monday Aramco, China Petroleum & Chemical Corp. (Sinopec) and Fujian Petrochemical Co. Ltd. (FPCL) launched the development of a fancy with a refinery that may produce 16 million tons every year (MMtpa) or 320,000 bpd, a 1.5 MMtpa ethylene unit, a plant to supply two million tons of paraxylene and derivatives, and a 300,000-ton petroleum terminal. The companions count on full operation by the top of 2030.
FPCL, a 50:50 three way partnership between Sinopec and Fujian Petrochemical Industrial Group Co., will maintain a 50 % stake within the advanced. Aramco and Sinopec will every personal 25 %.
“We’ll provide in extra of 1 million barrels per day of our crude oil to those excessive chemical conversion belongings in China, reinforcing Aramco’s position as a dependable and long-term associate in China’s improvement”, Al Qahtani stated.
“This additionally advances our liquids-to-chemicals technique, by way of which we intend to direct extra of our crude in direction of serving to meet rising world petrochemicals demand”.
In 2023 Aramco and its co-venturers in Huajin Aramco Petrochemical Co. (HAPCO) launched development for a refining and petrochemicals advanced within the Chinese language metropolis of Panjin, as introduced Might 9, 2023. Aramco will provide as much as 210,000 bpd of crude to the power, owned by HAPCO, the place Aramco has 30 % possession. The Panjin advanced is deliberate to succeed in full operation by 2026.
Earlier in 2024 Aramco signed offers with Rongsheng Petrochemical and one other Chinese language refiner laying the groundwork for potential stake acquisitions.
Signed as a part of the go to to the dominion of a delegation led by Premier Li Qiang, the agreements included “preliminary documentation referring to a Growth Framework Settlement with Rongsheng Petrochemical Co. Ltd. (Rongsheng) and a Strategic Cooperation Settlement with Hengli Group Co., Ltd.”, Aramco stated in a press launch September 11, 2024.
The Growth Framework Settlement with Rongsheng Petrochemical, executed Tuesday, follows a Cooperation Framework Settlement signed by the 2 corporations April 27. The Cooperation Framework Settlement gives for Rongsheng Petrochemical’s potential acquisition of a 50 % curiosity in SASREF and Aramco’s potential buy of a 50 % stake in Rongsheng Petrochemical’s Ningbo Zhongjin Petrochemical Co. Ltd.
Aramco already holds a ten % stake in Rongsheng Petrochemical, after final yr’s completion of an acquisition deal that includes the provision of 480,000 bpd of petroleum from Saudi Arabia to what Aramco stated was China’s greatest built-in refining and chemical substances 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.
The opposite settlement signed throughout the Chinese language delegation’s go to “advances talks referring to Aramco’s potential acquisition of a ten % stake in Hengli Petrochemical Co. Ltd., topic to due diligence and required regulatory clearances”, Aramco stated.
“China is a crucial nation in our world downstream development technique, and we stay up for constructing on a relationship that spans greater than three a long time to unlock new alternatives on this essential market”, Al Qahtani stated then.
Additionally in 2023 Aramco signed agreements securing talks for potential acquisition 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 Trade Group Co. Ltd., as introduced September 27, 2023.
To contact the writer, e-mail jov.onsat@rigzone.com
