US$3.4 Billion Purchase Follows Earlier Deal to Construct World-Scale Refinery
Saudi state-controlled energy major Aramco has completed the US$3.4 billion purchase of a 10 percent stake in China’s Rongsheng Petrochemical Company.
The deal, which follows the signing of definitive strategic agreements by both parties earlier this year, represents the growth of Aramco’s downstream operations in China, the company said in a filing.
The acquisition, executed through its Netherlands-based subsidiary Aramco Overseas Company, includes the supply of 480,000 barrels per day, or b/d, of Arabian crude to China’s largest integrated refining and chemicals complex, owned by Rongsheng affiliate Zhejiang Petroleum and Chemical Company.
ZPC can process up to 800,000 b/d of oil to produce some 4.2 tons of ethylene per year.
“Our strategic partnership with Rongsheng advances Aramco’s liquids to chemicals strategy while growing our presence in China and showcases our importance as a reliable supplier of crude oil,” said Mohammed Y. Al Qahtani, Aramco’s downstream president. “This key acquisition is an important part of Aramco’s long-term growth strategy, expanding our presence in a vital market.”
The Rongsheng deal comes as Saudi Arabia seeks to strengthen commercial ties with China, its largest trading partner.
In March, Aramco announced its joint venture Huajin Aramco Petrochemical Company, or Hapco, would start construction of a 300,000 b/d refinery and petrochemical plant in Liaoning Province, northeast China. Aramco, which has a 30 percent stake in Hapco, will supply up to 210,000 b/d of crude feedstock to the complex.
Aramco's partners in the venture are Norinco Group, which owns 51 percent, and Panjin Xincheng Industrial Group, which holds 19 percent.
Aramco is a member of the Breakbulk Global Shipper Network, an extensive networking platform for executives operating at the top end of the project supply chain in sectors such as oil and gas, energy and renewables, mining and minerals, construction, forestry, industrial manufacturing and aerospace.
The next in-person meet-up for BGSN members will be at Breakbulk Americas 2023, taking place on 26-28 September at the George R. Brown Convention Center in Houston, Texas.
PHOTO: Operators at a Saudi Aramco Facility. CREDIT: Aramco
