Energy tycoon Saudi Aramco has paid $3.4 billion for a 10% stake in the Chinese company Rongsheng Petrochemical Co. The agreement, which was reached after both businesses signed binding strategic agreements on March 27, shows how Aramco's downstream position in China is continuing to expand. To the largest integrated refining and chemicals complex in China, which is controlled by Rongsheng affiliate Zhejiang Petroleum and Chemical Co., Arabian crude at a rate of 480,000 barrels per day is supplied. The actual agreement was made through Aramco Overseas Co., a subsidiary of the Saudi business established in the Netherlands.
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.”
In ZPC, which has the ability to process 800,000 bpd of crude oil and generate 4.2 million tons of ethylene annually, Rongsheng holds a 51 percent equity stake. Amin Nasser, the CEO of Aramco, stated in March that the corporation intends to be "an all-inclusive source of energy and chemicals" for the Asian nation. As a result, Aramco has been expanding its footprint in China.
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.”