Dhahran, Saudi Arabia, March 28, 2023 (Reuters) /PRNewswire/ – – The deal includes the delivery of 480,000 barrels per day of crude oil to the largest integrated refining and chemical complex in China
Aramco, one of the world’s leading integrated energy and chemical companies, has entered into definitive agreements to acquire a 10% interest in Shenzhen-listed Rongsheng Petrochemical Co. Ltd. (“Rongsheng”) for RMB24.6 billion (US$3.6 billion at current exchange rates). This transaction would significantly expand the Company’s downstream presence in China.
Under a strategic long-term sale agreement, Aramco will sell 480,000 barrels per day (bpd) of Arabian crude oil to Rongsheng subsidiary Zhejiang Petroleum and Chemical Co. Ltd. (ZPC) deliver. Aramco Overseas Company (“AOC”), a wholly owned subsidiary of Aramco, will acquire the interest in Rongsheng.
Among other things, Rongsheng owns a 51% interest in ZPC, which in turn owns and operates the largest integrated refining and chemical complex in China with a processing capacity of 800,000 bpd of crude oil and an annual production capacity of 4.2 million tons of ethylene.
Mohammed Y. Al Qahtani, Executive Vice President Downstream of Aramco, explained: “This announcement demonstrates Aramco’s long-term commitment to China and belief in the fundamentals of China’s petrochemical sector. It is an important acquisition for Aramco in a key market that supports our growth ambitions and advances our liquid-to-chemical conversion strategy. It also promises to ensure a reliable supply of crude oil to one of China’s most important refineries.
Li Shuirong, Chairman of Rongsheng said: “This strategic cooperation will take our long-standing friendship and mutual trust to a new level and pave the way to a bright future for the high-quality development of the global petrochemical industry. I am convinced that the participation of Aramco will significantly help Rongsheng execute its petrochemical growth strategy.”
The investment would anchor an important link between Aramco, Rongsheng and ZPC, which operates one of the most advanced chemical conversion plants in the world.
The transaction involves an over-the-counter secondary sale of Rongsheng shares by majority shareholder Zhejiang Rongsheng Holding Group, which offers the potential for future cooperation between the players in trading, refining, chemical production and technology licensing. The transaction is expected to be completed by the end of 2023 and is subject to regulatory approvals.
Earlier, on March 26, it was announced that the Aramco joint venture Huajin Aramco Petrochemical Company (HAPCO) plans to start construction of a large-scale integrated refining and petrochemical complex in northeast China in the second quarter of 2023. Aramco, which owns a 30% interest in HAPCO, will supply up to 210,000 bpd of crude oil to the complex.
As part of the partnership with Rongsheng and the HAPCO joint venture, Aramco would ship a total of 690,000 bpd of crude oil to high chemical processing plants.
Information about Aramco
Aramco is a global integrated energy and chemical company. We are driven by the core belief that energy is an opportunity. From extracting approximately one in eight barrels of the world’s oil supply to developing new energy technologies, our global team strives to make a difference in everything we do. We focus on making our resources more reliable, sustainable and useful. This helps promote stability and long-term growth around the world. www.aramco.com.
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