September 12, 2024 [Oilprice]- The world’s biggest crude oil exporter and largest oil company, Saudi Aramco, has signed additional agreements with China’s Rongsheng Petrochemical and Hengli Group to advance talks on cooperation in the refining and petrochemical sectors in China and Saudi Arabia.
Aramco signed a Development Framework Agreement with Rongsheng regarding the potential joint development of an expansion of Saudi Aramco Jubail Refinery Company (SASREF) facilities, the Saudi oil giant said on Wednesday.
The agreement is a follow-up of an April cooperation agreement about forming the joint venture in SASREF, as well as significant investments in the Saudi and Chinese petrochemical sectors. Rongsheng could potentially buy 50% stake in SASREF, the development of a liquids-to-chemicals expansion project at SASREF, while Aramco could acquire 50% in Rongsheng’s affiliate Ningbo Zhongjin Petrochemical Co. Ltd. (ZJPC), and participate in ZJPC’s expansion project.
Aramco’s agreement with Hengli Group advances talks relating to Aramco’s potential acquisition of a 10% stake in Hengli Petrochemical Co., Ltd., subject to due diligence and required regulatory clearances.
Earlier this year, Aramco entered into discussions with Hengli Group about the potential acquisition of 10% in Hengli Petrochemical.
“China is an important country in our global downstream growth strategy, and we look forward to building on a relationship that spans more than three decades to unlock new opportunities in this crucial market,” Mohammed Al Qahtani, Aramco Downstream President, said, commenting on the deals announced today.
Saudi Aramco continues to be on the lookout for acquisition opportunities in the downstream and LNG, 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 been pursuing deals to expand its international downstream presence, especially 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.
Earlier in 2023, Aramco announced two major refinery and petrochemical deals in China, which not only give the world’s largest oil firm a share of the Chinese downstream market but also an additional export outlet for 690,000 bpd of Saudi crude in China.
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