Saudi Arabian energy company Aramco has wrapped up the previously announced CNY24.6bn ($3.4bn) acquisition of a 10% stake in China-based downstream company Rongsheng Petrochemical.

The deal, which was announced in March 2023, is expected to considerably expand Aramco’s downstream footprint in China. It was executed through its Netherlands-based subsidiary Aramco Overseas.

As part of the transaction, Aramco will be supplying 480,000 barrels per day of Arabian crude oil to an integrated refining and chemicals complex, under a long-term sales agreement.

Considered to be the largest of its kind in China, the petrochemical complex is owned by Rongsheng Petrochemical’s affiliate Zhejiang Petroleum and Chemical (ZPC).

Rongsheng Petrochemical has a stake of 51% in Zhejiang Petroleum and Chemical. The refining and chemicals complex is designed to process 800,000 barrels per day (bpd) of crude oil and produce 4.2 million metric tons of ethylene per annum.

Aramco downstream president Mohammed Al Qahtani said: “Our strategic partnership with Rongsheng advances Aramco’s liquids to chemicals strategy while growing our presence in China and showcases our importance as a reliable supplier of crude oil.

“This key acquisition is an important part of Aramco’s long-term growth strategy, expanding our presence in a vital market.”

The deal involved an off-market secondary sale of Rongsheng Petrochemical’s shares by majority shareholder Zhejiang Rongsheng Holding Group. Besides, the agreement also includes scope for future collaboration between the parties in the areas of trading, refining, production of chemicals, and licensing of technology.

It follows an announcement made by Aramco in March 2023 that its joint venture Huajin Aramco Petrochemical Company (HAPCO) started construction on a major integrated refinery and petrochemical complex in northeast China.

Aramco, which holds a stake of 30% in HAPCO, will provide up to 210,000bpd of crude oil feedstock to the refinery and petrochemical complex.

Put together, the partnership with Rongsheng Petrochemical and the HAPCO joint venture will have the Saudi Arabian oil and gas company supplying a total of 690,000bpd of crude to high chemical conversion facilities in China.