Saudi Aramco has signed agreements to acquire a 9% stake in the Zhejiang petrochemical project in the Chinese province of Zhejiang for an undisclosed price.
The Zhejiang petrochemical project to be built in the city of Zhoushan is planned to have a capacity of 800,000 barrels per day.
Saudi Aramco signed an agreement with the Zhoushan government to acquire its 9% stake in the refinery and petrochemical complex.
The Arabian company has signed a second agreement with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, the other shareholders of Zhejiang Petrochemical, the holding company of the Chinese petrochemical project.
Saudi Aramco said that its involvement in the project will come with a long-term crude supply agreement and the ability to use Zhejiang Petrochemical’s large crude oil storage facility to cater to its customers in Asia.
The company has signed a third agreement with Zhejiang Energy to develop a large scale retail network in the in the Zhejiang province in the coming five years. The retail business will be integrated with the Zhejiang petrochemical project as an outlet for the produced refined products.
Saudi Aramco said that the three Memoranda of Understanding (MoUs) it has signed are for growing its downstream presence in Zhejiang.
The Zhejiang petrochemical project will be built in two phases with the first one to include a newly constructed 400,000 barrels per day refinery with a 1.4 mmtpa ethylene cracker unit, and a 5.2 mmtpa aromatics unit. Phase II will involve a 400,000 barrels per day refinery expansion and will see deeper chemical integration than Phase I.
Saudi Aramco CEO Amin Nasser said: “The agreements demonstrate our commitment to the Chinese market and help enhance the strategic integration of our downstream network in Asia. They will further strengthen our relationship with China and the Zhejiang province, setting the stage for more cooperation in the future.”
Last week, Saudi Aramco entered into a joint venture agreement with NORINCO Group and Panjin Sincen to develop a fully integrated refining and petrochemical complex in Panjin in another Chinese province Liaoning.
The joint venture, called Huajin Aramco Petrochemical is expected to invest over $10bn to build what will be a 300 thousand barrel per day refinery, equipped with a 1.5 million metric tons per annum (mmtpa) ethylene cracker and a 1.3 mmtpa PX unit.