RIYADH: Energy giant Saudi Aramco has completed its purchase of a 10 percent stake in China-based firm Rongsheng Petrochemical Co. for $3.4 billion.
The deal follows the signing of definitive strategic agreements by both companies on March 27, and represents the continued growth of Aramco’s downstream presence in China, according to a press release.
It includes the supply of 480,000 barrels per day of Arabian crude to the largest Chinese integrated refining and chemicals complex, which is owned by Rongsheng affiliate Zhejiang Petroleum and Chemical Co.
The deal itself was struck through the Saudi company’s Netherlands-based subsidiary Aramco Overseas Co.
Aramco Downstream President Mohammed Al-Qahtani said: “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.
“This key acquisition is an important part of Aramco’s long-term growth strategy, expanding our presence in a vital market.”
Li Shuirong, chairman of Rongsheng, also welcomed the deal, and said: “The completion of this transaction marks the entry of Rongsheng and Aramco into a new era together, and also signifies an important step forward in Rongsheng's internationalization strategy.”
Rongsheng owns a 51 percent equity interest in ZPC, whose complex has the capacity to process 800,000 bpd of crude oil and produce 4.2 million tons of ethylene per year.
Aramco has been stepping up its presence in China, with the company’s CEO Amin Nasser saying in March the firm wants to be “an all-inclusive source of energy and chemicals” for the Asian country.
Nasser made the comments during the China Development Forum held in Beijing, and added: “That’s why we are doubling down on China’s energy supply, including new lower carbon products, chemicals, and advanced materials, all supported by emissions reduction technologies.”
Other deals involving Aramco include a deal with China’s Norinco Group and Panjin Xincheng Industrial Group to form a joint venture named Huajin Aramco Petrochemical Co., aimed at constructing a refinery and petrochemical complex in the Asian giant’s Liaoning province.
The agreement — also signed in March — sees Aramco holding a 30 percent stake in HAPCO, and the Saudi firm will supply up to 210,000 bpd of crude oil feedstock to the complex.
