RIYADH: Global energy giant Saudi Arabian Oil Co. has further expanded its presence in China by acquiring a 10 percent stake in Shenzhen-listed Rongsheng Petrochemical Co. for $3.6 billion.
According to a press release, Aramco will supply 480,000 barrels per day of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co. under a long-term sales agreement.
It further noted that Aramco Overseas Co., a wholly owned subsidiary of Aramco, will acquire the interest in Rongsheng.
“This announcement demonstrates Aramco’s long-term commitment to China and belief in the fundamentals of the Chinese petrochemicals sector,” said Aramco Executive Vice President of Downstream Mohammed Y. Al-Qahtani.
He added: “It is an important acquisition for Aramco in a key market, supporting our growth ambitions and advancing our liquids to chemicals strategy. It also promises to secure a reliable supply of essential crude to one of China’s most important refiners.”
Rongsheng owns a 51 percent 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 tons of ethylene per year.
“This strategic cooperation will take our long-term friendship and mutual trust to a new level and paves the way for a bright future for the high-quality development of the world’s petrochemicals industry,” said Rongsheng Chairman Li Shuirong.
Shuirong added that Aramco’s involvement will help Rongsheng implement its petrochemical growth strategy.
On March 26, Aramco inked a deal with China’s Norinco Group and Panjin Xincheng Industrial Group to form a joint venture named Huajin Aramco Petrochemical Company, aimed at constructing a refinery and petrochemical complex in the Asian giant’s Liaoning province.
Aramco holds a 30 percent stake in HAPCO, and the Saudi firm will supply up to 210,000 bpd of crude oil feedstock to the complex.
Combined, the partnership with Rongsheng and the HAPCO joint venture would see Aramco supply a total of 690,000 bpd of crude to high chemical conversion assets, the press release added.
During the China Development Forum in Beijing on Sunday, Aramco CEO Amin Nasser affirmed its support for China’s long-term energy security and development.
“We want to be an all-inclusive source of energy and chemicals for China’s long-term energy security and China’s high-quality development — to the horizon, and even beyond,” said Nasser.
He added: “That’s why we are doubling down on China’s energy supply, including new lower carbon products, chemicals, and advanced materials, all supported by emissions reduction technologies.”