Saudi Aramco is stepping up cooperation with Chinese petrochemical giants

The world’s largest crude oil exporter and largest oil company, Saudi Aramco, has signed additional agreements with China’s Rongsheng Petrochemical and Hengli Group to advance discussions on cooperation in the refining and petrochemical sectors of China and Saudi Arabia.

Aramco has signed a framework development agreement with Rongsheng on the potential joint development of an expansion of the Saudi Aramco Jubail Refinery Company (SASREF) facilities, the Saudi oil giant said on Wednesday.

The agreement is a continuation of an April cooperation agreement on the formation of the joint venture in SASREF, as well as significant investments in the petrochemical sectors of Saudi Arabia and China. Rongsheng could buy 50% of SASREF shares, developing a liquids-chemicals expansion project at SASREF, while Aramco could buy 50% of Rongsheng’s affiliate Ningbo Zhongjin Petrochemical Co. Ltd. (ZJPC), and participate in the expansion project of ZJPC. .

Aramco’s agreement with Hengli Group advances discussions regarding Aramco’s potential acquisition of a 10% stake in Hengli Petrochemical Co., Ltd., subject to due diligence and regulatory approvals.

Earlier this year, Aramco entered into discussions with Hengli Group regarding the potential acquisition of 10% of Hengli Petrochemical.

“China is an important country in our global downstream growth strategy and we look forward to building on a relationship spanning more than three decades to unlock new opportunities in this crucial market,” said Mohammed Al Qahtani, Chairman Aramco Downstream, commenting on the deals announced today.

Saudi Aramco continues to look for downstream and LNG acquisition opportunities, Yasser Mufti, Aramco’s executive vice president for products and customers, told Reuters in an interview earlier this month.

In recent years, the Saudi oil giant has pursued deals to expand its international presence downstream, particularly in demand centers such as Asia.

Last year, Aramco entered Pakistan’s downstream market by acquiring a 40% stake in Gas & Oil Pakistan Ltd, one of the country’s largest retail and storage companies.

In early 2023, Aramco announced two major refining and petrochemical deals in China that not only give the world’s largest oil company a share of the Chinese downstream market, but also an additional export outlet for 690,000 bpd of crude Saudi in China.

By Charles Kennedy for Oilprice.com

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