Saudi energy giant Aramco, which is the world’s largest integrated oil and gas company, is planning to grow its investment in its Chinese partner, as it expands its footprint in the country.
Aramco and Rongsheng, a Hangzhou-based privately owned refiner, entered into a memorandum of understanding a day earlier. Aramco is in talks with Rongsheng Petrochemical to acquire a maximum 50% stake in the latter’s subsidiary Ningbo Chongjin Petrochemical, the Chinese company said in a Wednesday filing to the Shenzhen Stock Exchange.
Rongsheng said it’s also discussing the possibility of taking a 50% stake in Saudi Aramco Jubail Refinery Company, the refining unit of the Saudi company.
Together, the companies can expand the Chinese subsidiary’s equipment and build the massive Rongsheng New Materials (Zhoushan) project, Rongsheng said.
The company added that the project has the potential to make high-performance petrochemicals, such as engineering plastics, special polyesters and high-end resins that can be used in electronic devices and semiconductors.
Saudi and China have notably grown their presence in each other’s country since last year. Aramco had in March 2023, agreed to buy a 10% stake in Rongsheng for 24.6 billion yuan ($3.5 billion). As part of the deal, it would supply 480,000 barrels per day of crude oil to the Chinese company.
China’s state-owned refining giant, Sinopec has a joint venture with Aramco operating a refinery project in the Yanbu Industrial City in Saudi Arabia. The Yanbu Aramco Sinopec Refining Company, which has been in operation since 2016, uses 400,000 barrels per day of Arabian heavy crude oil to produce premium transportation fuels, according to the company.