Aramco Acquires 10 percent Stake in Rongsheng Petrochemical
Date
3/28/2023 2:30:26 AM
(MENAFN) Saudi Arabian Oil Co. (Aramco) has expanded its presence in China by acquiring a 10 percent stake in Shenzhen-listed Rongsheng Petrochemical Co. for USD3.6 billion. Aramco Overseas Co., a wholly owned subsidiary of Aramco, will acquire the interest in Rongsheng. As part of the deal, 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. The Acquisition of Rongsheng is an important move for Aramco in a key market, supporting its growth ambitions and advancing its liquids to chemicals strategy.
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 barrels per day of crude oil and produce 4.2 million metric tons of ethylene per year. Aramco's involvement in Rongsheng is expected to help the company implement its petrochemical growth strategy.
Aramco's Executive Vice President of Downstream, Mohammed Y. Al-Qahtani, said that the acquisition demonstrates Aramco's long-term commitment to China and belief in the fundamentals of the Chinese petrochemicals sector. He added that the deal promises to secure a reliable supply of essential crude to one of China's most important refiners. Rongsheng Chairman Li Shuirong said that the strategic cooperation between the two companies will take their long-term friendship and mutual trust to a new level and pave the way for a bright future for the world's petrochemicals industry.
This acquisition is part of Aramco's efforts to expand its presence in China. In March, Aramco signed a deal with China's Norinco Group and Panjin Xincheng Industrial Group to form a joint venture named Huajin Aramco Petrochemical Company. The joint venture aims to construct a refinery and petrochemical complex in Liaoning province, and Aramco holds a 30 percent stake in HAPCO. The Saudi firm will supply up to 210,000 barrels per day 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 barrels per day of crude to high chemical conversion assets.
Aramco's CEO, Amin Nasser, affirmed the company's support for China's long-term energy security and development during the China Development Forum in Beijing. He added that Aramco wants to be an all-inclusive source of energy and chemicals for China's long-term energy security and high-quality development, including new lower carbon products, chemicals, and advanced materials, all supported by emissions reduction technologies. Aramco's expansion in China is part of its efforts to diversify its operations and expand its global presence.
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