Aramco has signed definitive agreements to acquire a 10% interest in Shenzhen-listed Rongsheng Petrochemical for $3.6 billion (€3.2 billion) in a deal that will expand its downstream presence in China.
Through the strategic arrangement, Aramco will supply 480,000 bpd of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical (ZPC), under a long-term sales agreement. Aramco Overseas Company (AOC), a wholly-owned subsidiary of Aramco, will acquire the interest in Rongsheng.
Among other assets, Rongsheng owns a 51% 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 to produce 4.2 million tpy of ethylene.
Mohammed Al Qahtani, Aramco executive vice-president of downstream, said: “This announcement demonstrates Aramco’s long-term commitment to China and belief in the fundamentals of the Chinese petrochemicals sector. 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.”
Li Shuirong, Rongsheng Chairman, said: “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. I believe that Aramco’s involvement will greatly help Rongsheng implement its petrochemical growth strategy.”
Aramco acquires stake in Chinese petrochemical business
