Aramco is Pushing into Chinese Space Through Purchase of 10% Stake in Rongsheng Petrochemical
Aramco will acquire a 10% stake in Rongsheng Petrochemical for $3.6 billion, enhancing downstream operations in China and supplying a combined total of 690,000 barrels per day (bpd) of crude through strategic partnerships with Rongsheng and the HAPCO joint venture.
Aramco has solidified an agreement to acquire a 10% stake in Rongsheng Petrochemical, a Shenzhen-listed company, for $3.6 billion, with the goal of expanding its downstream presence in China. As part of the strategic partnership, Aramco will supply 480,000 bpd of Arabian crude oil to Rongsheng's affiliate, Zhejiang Petroleum and Chemical (ZPC), under a long-term sales contract.
Notably, Rongsheng holds a 51% equity interest in ZPC. Both Aramco's Executive Vice President of Downstream, Mohammed Y. Al Qahtani, and Rongsheng's Chairman, Li Shuirong, have expressed optimism about this collaboration's potential to boost the global petrochemical industry.
Pending regulatory approval, the deal is expected to close by the end of 2023. This announcement follows the news of Aramco's joint venture, Huajin Aramco Petrochemical Company (HAPCO), planning to begin constructing a major integrated refinery and petrochemical complex in northeast China in 2Q 2023. Ultimately, the Rongsheng partnership and the HAPCO joint venture will enable Aramco to supply a total of 690,000 bpd of crude to advanced chemical conversion facilities.
