Saudi Arabia’s energy company Aramco signed an agreement to acquire a 10% share of Chinese Rongsheng Petrochemical for 24.6 billion yuan ($3.6 billion), Aramco announced in a statement on Monday.
The agreement, which would significantly increase Aramco’s downstream presence in China, was reached after Aramco President Amin Nasser traveled to China to attend the China Development Forum (CDF).
Under the agreement, Aramco will supply 480,000 barrels per day (bpd) of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical, through a wholly-owned subsidiary of Aramco Overseas Company.
‘It is an important acquisition for Aramco in a key market, supporting our growth ambitions and advancing our liquids to chemicals strategy,’ Mohammed Al Qahtani, Aramco executive vice president of downstream, was quoted as saying in the statement.
Rongsheng’s Chairman Li Shuirong expressed hope that Aramco’s involvement would greatly help Rongsheng implement its petrochemical growth strategy.
The transaction, which is subject to regulatory approvals, is expected to close by the end of 2023.
Aramco’s decision to acquire Rongsheng’s shares followed its landmark agreement to build an integrated refinery and petrochemical complex for 83.7 billion yuan ($12.2 billion) in northeast China with two Chinese partners, the Norinco Group and Panjin Xincheng Industrial Group.
