Aramco and Rongsheng move on chem plant expansion

Saudi Aramco is accelerating plans to expand the liquids-to-chemicals project in Jubail in collaboration with China’s Rongsheng Petrochemical Company.

The companies have signed a development framework agreement to potentially expand Saudi Aramco Jubail Refinery Company (Sasref) facilities and increase investments in the petrochemical sectors of both nations.

This follows a cooperation framework signed in April, where Rongsheng proposed acquiring a 50 percent stake in Sasref, while Aramco explored the possibility of buying a 50 percent stake in Rongsheng’s affiliate, Ningbo Zhongjin Petrochemical Co. (ZJPC) and taking part in ZJPC’s expansion.

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Last year Aramco completed the acquisition of a 10 percent stake in Rongsheng for $3.4 billion through its subsidiary Aramco Overseas Company BV, based in the Netherlands.

The Saudi-listed oil producer announced plans to construct a $10 billion integrated refinery and petrochemical complex in northeast China in the second quarter of 2023.

Aramco also signed a strategic cooperation agreement with Hengli Group Company to advance discussions on acquiring a 10 percent stake in Hengli Petrochemical, which operates a 400,000-barrel-per-day refinery and chemicals complex in Liaoning, China. The companies signed a memorandum of understanding in April 2024.

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The agreements, signed during the visit of Chinese Premier Li Qiang to the kingdom, reaffirm Aramco’s close collaboration with its Chinese partners, said the company’s downstream president Mohammed Al Qahtani.

“China is an important country in our global downstream growth strategy,” he said.

Saudi Arabia, the Gulf’s biggest economy, has attracted greenfield FDI of nearly $29 billion, more than double the total in 2022.

China was by far the biggest investor, with $16.8 billion, reflecting Saudi Arabia’s pivot to the East since the “watershed” visit of President Xi Jinping to Riyadh in December 2022.