RIYADH: Saudi Aramco has signed a provisional acquisition agreement for a 10 percent stake in Chinese firm Shandong Yulong Petrochemical.
The potential deal would advance the energy giant’s global downstream expansion, and comes in the wake of similar memorandums of understanding signed with companies in the Asian country.
Shandong Yulong is presently in the final stages of constructing a refining and petrochemicals complex in Longkou, Yantai City, in Shandong Province, China.
This complex boasts a processing capacity of approximately 400,000 barrels of crude oil per day and is set to play a crucial role in the production of a significant volume of petrochemicals and their derivatives.
As outlined in the MoU, Aramco would potentially supply Shandong Yulong with crude oil and other feedstock, a statement said, adding that the deal is subject to due diligence, negotiation of transaction documents, and required regulatory clearance.
Aramco Downstream President Mohammed Y. Al Qahtani said: “As one of China’s largest refining and chemical centers, Aramco values Shandong for its current strength and future prospects.
“We believe this collaboration has the potential to enable all parties to contribute to China’s energy security and development, and aid in navigating the energy transition.”
He added: “With Aramco’s long track record as a reliable supplier of energy to China, and the expertise and commitment of Shandong province, we envision a prosperous future together.”
The MoU signing follows last month’s announcement that Aramco had signed a cooperation framework agreement with Jiangsu Eastern Shenghong Co., Ltd., to also facilitate discussions relating to a possible acquisition of 10 percent of Jiangsu Shenghong Petrochemical Industry Group Co., Ltd., a wholly-owned subsidiary of Eastern Shenghong.
In March, Aramco signed definitive agreements to acquire a 10 percent interest in Shenzhen-listed Rongsheng Petrochemical Co. Ltd. for 24.6 billion Chinese yuan ($2.74 billion), in a deal that would significantly expand its downstream presence in China.
