China-based Rongsheng Petrochemical and Saudi Aramco are in talks for a significant cross-investment in each other’s refining units.
An MOU has been signed between the parties, further deepening their partnership following a series of agreements in March 2023.
The Chinese company intends to acquire a 50% stake in Aramco’s Saudi Aramco Jubail Refinery Company (SASREF) refining unit as well as boost refining and chemical production capacity, enhance product flexibility and undertake expansion.
Situated in Jubail Industrial city, the SASREF unit has the capacity to process 305,000 barrels of oil per day into various petroleum products.
Rongsheng is also negotiating the sale of up to a 50% stake in its own Ningbo Zhongjin Petrochemical unit to Aramco.
The companies are also looking to upgrade and expand Zhongjin Petrochemical’s existing facilities and develop the Rongsheng Petrochemical Sheng New Materials (Zhoushan) project.
In a press statement, Rongsheng said: “This cooperation between the two parties will not only bring more sufficient, stable and competitive petrochemical raw materials, more advanced chemical technology, and a more systematic and coordinated global industrial system to Rongsheng Petrochemical, but Rongsheng Petrochemical will also be able to use large-scale refining.
“The construction and operation experience of chemical integration projects will help Saudi Aramco achieve its strategic goal of expanding the chemical industry chain.”
Furthermore, Aramco is considering purchasing a 10% stake in Shandong Yulong Petrochemical, which is developing a refinery capable of processing 400,000 barrels of crude oil daily in Shandong province, reported Reuters.