The operation involves the placement of 480,000 barrels of crude oil per day in the largest integrated refining and chemical complex in China
DHAHRAN, Saudi Arabia, March 27, 2023 /PRNewswire/ — Aramco, one of the world’s leading integrated chemical and energy companies, has signed definitive agreements to acquire a 10% stake in Rongsheng Petrochemical Co. Ltd. (“Rongsheng “), listed in Shenzhen, for RMB 24.6 billion ($3.6 billion at current exchange rates), in a deal that would significantly expand its presence in China.
Under the strategic agreement, Aramco will supply 480,000 barrels per day (bpd) of Arabian crude to Rongsheng subsidiary Zhejiang Petroleum and Chemical Co. Ltd (ZPC) under a long-term sales agreement. Aramco Overseas Company (“AOC”), a 100% subsidiary of Aramco, will acquire the interest in Rongsheng.
Among other assets, Rongsheng owns a 51% stake in ZPC, which in turn owns and operates China’s largest integrated refining and chemical complex, with the capacity to process 800,000 bpd of crude and produce 4.2 million tonnes. metrics of ethylene per year.
Mohammed Y. Al Qahtani, Aramco’s Executive Vice President of Downstream, said: “This announcement demonstrates Aramco’s long-term commitment to China and its confidence in the fundamentals of the Chinese petrochemical sector. This is a significant acquisition for Aramco in a market which supports our growth ambitions and drives our liquids-to-chemicals strategy. It also promises to ensure a reliable supply of essential crude oil to one of China’s largest refiners.”
Li Shuirong, Chairman of Rongsheng, said, “This strategic cooperation will take our long-term friendship and mutual trust to a new level, and pave the way for a bright future for the high-quality development of the world petrochemical industry. I believe that Aramco’s participation will greatly help Rongsheng implement its petrochemical growth strategy.”
The investment would anchor a major partnership between Aramco, Rongsheng and ZPC, which operates one of the world’s most advanced chemical conversion assets.
The transaction involves a secondary off-market sale of Rongsheng shares by majority shareholder Zhejiang Rongsheng Holding Group, with potential for future collaboration between the parties in trading, refining, chemical production and technology licensing. The transaction is expected to close in late 2023, and is subject to regulatory approvals.
It follows the announcement on March 26 that Aramco’s joint venture, Huajin Aramco Petrochemical Company (HAPCO), planned to break ground on a major integrated refinery and petrochemical complex in northeast China in the second quarter of 2023. Aramco, which has a 30% stake in HAPCO, will supply up to 210,000 bpd of feed crude to the complex.
Combined, the partnership with Rongsheng and the HAPCO joint venture would see Aramco supply a total of 690,000 bpd of crude oil to high-chemical conversion assets.
About Aramco
Aramco is a global integrated energy and chemicals company. We are moved by the conviction that energy is an opportunity. From producing approximately one in eight barrels of the world’s oil supply to developing new energy technologies, our global team is dedicated to creating impact in everything we do. We focus on making our resources more reliable, more sustainable, and more useful. This helps promote long-term stability and growth around the world. www.aramco.com.
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