Saudi oil giant Aramco has signed new agreements with China’s Rongsheng Petrochemical and Hengli Group to further discussions on collaboration in the refining and petrochemical industries in both China and Saudi Arabia.
Development framework agreement with Rongsheng
Aramco announced that it had entered into a Development Framework Agreement with Rongsheng focused on the potential joint expansion of the Saudi Aramco Jubail Refinery Company (SASREF) facilities. This agreement builds upon an earlier cooperation accord from April, which aimed at forming a joint venture in SASREF and making significant investments in the petrochemical sectors of both countries. Rongsheng might acquire a 50 percent stake in SASREF, along with the development of a liquids-to-chemicals expansion project there. Conversely, Aramco has the option to take a 50 percent share in Rongsheng’s affiliate, Ningbo Zhongjin Petrochemical Co. Ltd. (ZJPC), and participate in its expansion efforts.
Mohammed Al Qahtani, Aramco’s Downstream president, commented on the deals by emphasizing that China plays a vital role in their global downstream growth strategy. He expressed anticipation for further developing a relationship that has lasted over three decades to explore new opportunities in this significant market.
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Collaboration with Hengli Group
Additionally, Aramco’s agreement with Hengli Group facilitates discussions regarding the potential acquisition of a 10 percent stake in Hengli Petrochemical Co., Ltd., pending due diligence and necessary regulatory approvals. Earlier this year, Aramco initiated talks with Hengli Group concerning this potential acquisition.
Ongoing acquisition strategy
Yasser Mufti, Aramco’s executive vice president for Products and Customers, mentioned in a recent interview with Reuters that the company is actively seeking acquisition opportunities in the downstream and LNG sectors. In recent years, the Saudi oil giant has been focused on expanding its international downstream footprint, particularly in key markets like Asia. Last year, Aramco entered Pakistan’s downstream sector by acquiring a 40 percent stake in Gas & Oil Pakistan Ltd., one of the nation’s largest retail and storage firms.
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