Saudi Aramco to buy 10% stake in China oil refinery for $3.6 billion - Hindustan Times
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Saudi Aramco to buy 10% stake in China oil refinery for $3.6 billion

Bloomberg | | Posted by Shobhit Gupta
Mar 27, 2023 04:28 PM IST

Saudi Aramco will supply 4,80,000 barrels of crude oil per day to Rongsheng Petrochemical's refinery in the eastern province of Zhejiang over a 20-year period.

Saudi Aramco, the world’s biggest oil producer, has agreed to buy a 10% stake in a giant oil complex in China for 24.6 billion yuan ($3.6 billion), in a deal that will significantly expand its refining presence in China.

FILE PHOTO: Saudi Aramco logo is pictured at the oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo(REUTERS)
FILE PHOTO: Saudi Aramco logo is pictured at the oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo(REUTERS)

Aramco will also supply 480,000 barrels of crude oil per day to Rongsheng Petrochemical Co’s refinery in the eastern province of Zhejiang over a 20-year period, according to a statement from the Chinese company. Aramco will provide a credit of $800 million to Rongsheng for the purchase, that statement said. Aramco Overseas Company, a subsidiary of Aramco, will acquire the shares.

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Rongsheng owns a 51% equity interest in Zhejiang Petroleum and Chemical Co., which in turn owns and operates the largest integrated refining and chemicals complex in China, with a capacity to process 800,000 barrels per day of crude oil and to produce 4.2 million metric tons of ethylene per year.

“This announcement demonstrates Aramco’s long-term commitment to China and belief in the fundamentals of the Chinese petrochemicals sector,” Mohammed Y. Al Qahtani, Aramco Executive Vice President of Downstream, said in a separate statement.

The deal comes a day after Saudi Aramco and its Chinese partners agreed to build a refining and petrochemical complex in China’s northeast, accelerating a development that was paused during the pandemic.

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