Saudi Aramco, the world’s biggest oil producer, has agreed to buy a 10% stake in a giant oil complex in China for 24.6 billion yuan ($4.76 billion), in a deal that will significantly expand its refining presence in China.
Aramco will also supply 480,000 barrels of crude oil per day to Rongsheng Petrochemical Co’s refinery in the eastern province of Zhejiang over a 20-year period, according to a statement from the Chinese company. Aramco will provide a credit of US$800 million ($1.06 billion) to Rongsheng for the purchase, that statement said. Aramco Overseas Company, a subsidiary of Aramco, will acquire the shares.
Rongsheng owns a 51% equity interest in Zhejiang Petroleum and Chemical Co, which in turn owns and operates the largest integrated refining and chemicals complex in China, with a capacity to process 800,000 barrels per day of crude oil and to produce 4.2 million metric tonnes of ethylene per year.
“This announcement demonstrates Aramco’s long-term commitment to China and belief in the fundamentals of the Chinese petrochemicals sector,” Mohammed Y. Al Qahtani, Aramco Executive Vice President of Downstream, said in a separate statement.
The deal comes a day after Saudi Aramco and its Chinese partners agreed to build a refining and petrochemical complex in China’s northeast, accelerating a development that was paused during the pandemic.
