Saudi Arabia’s state-owned oil giant, Saudi Aramco, is planning to acquire a 10% stake in the Chinese listed company Rongsheng Petrochemical Co. Ltd for RMB 24.6 billion ($3.6B). Aramco’s downstream presence in China is expected to expand significantly as a result of this move.
Aramco’s joint venture, Huajin Aramco Petrochemical Company, is also set to begin constructing a refinery and petrochemical complex in northeastern China in the second quarter of 2023. The deal will include a long-term sales agreement, in which Aramco will supply 480,000 barrels per day of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co. Ltd.
Aramco Overseas Company will purchase the interest in Rongsheng, subject to regulatory approval. The sale of Rongsheng’s shares is expected to be completed by the end of 2023.
Rongsheng owns more than half (51%) equity interest in ZPC, which in turn owns and operates the largest integrated refining and chemicals complex in China with a capacity to process 800,000 bpd of crude oil and produce 4.2 million metric tonnes of ethylene per year.
“It is an important acquisition for Aramco in a key market, supporting our growth ambtions and advancing our liquids to chemicals strategy,” said Mohammed Al Qahtani, Aramco Executive Vice President of Downstream.
The deal with Rongsheng and the HAPCO joint venture would see the oil giant supply 690,000 bpd of crude oil to high chemical conversion assets, the statement said.
