On January 2, Rongsheng Petrochemical Co., Ltd. (hereinafter referred to as “Rongsheng Petrochemical”) announced that Rongsheng Petrochemical and Saudi Aramco signed a “Memorandum of Understanding” in Dhahran, Saudi Arabia, according to which the two parties intend to acquire each other’s subordinate entity shares.
According to the MOU, the two parties are discussing the proposed acquisition of a 50% stake in Saudi Aramco Jubail Refining & Chemical Company (“SASREF”) by Rongsheng Petrochemical (or its affiliates), and intends to increase refining and chemical capacity through expansion, and improve product flexibility, complexity and quality. At the same time, the two parties are also discussing the potential acquisition of no more than 50% equity interest by Saudi Aramco (or its affiliates) in Ningbo Zhongjin Petrochemical Co., Ltd., a subsidiary of Rongsheng Petrochemical, and jointly develop the upgrading and expansion of CICC Petrochemical’s existing units and the development of a new downstream Rongsheng New Materials (Zhoushan) project.
As one of the world’s largest integrated oil, gas and chemical companies, Saudi Aramco has a significant presence in the global oil industry chain. The business is present in the Kingdom and around the world. It is mainly engaged in oil exploration, development, production, refining, transportation and sales, and has the world’s largest onshore and offshore oil fields.
Rongsheng Petrochemical operates the world’s largest monomer refinery, Zhejiang Petrochemical 40 million tons of refining and chemical integration project, and also lays out Ningbo Zhongjin Petrochemical Aromatics Project, Yisheng PTA Project, etc., is an important producer of polyester, new energy materials, engineering plastics and high value-added polyolefins in China and Asia, is the world’s largest PX, PTA and other chemical manufacturers, and the production capacity of polyethylene, polypropylene, PET, EVA, ABS, PC and other products ranks among the top in the world. At present, Rongsheng is also laying out new projects such as the upgrading and expansion of Ningbo Zhongjin Petrochemical and Rongsheng New Materials (Zhoushan).
The acquisition of Saudi Aramco’s refinery equity in Saudi Arabia and its participation in its expansion projects, as well as the introduction of Saudi Aramco’s deep participation in the construction of domestic projects, is an important strategic layout for Rongsheng Petrochemical to accelerate the realization of the global coordinated development of the petrochemical industry.
The cooperation between the two parties will not only bring more abundant, stable and competitive petrochemical raw materials, more advanced chemical technology, and a more systematic and coordinated global industrial system to Rongsheng Petrochemical, but also help Saudi Aramco achieve its strategic goal of expanding the chemical industry chain with its experience in the construction and operation of large-scale refining and chemical integration projects.
Previously, on March 27, 2023, Saudi Aramco and Rongsheng Petrochemical signed a series of cooperation agreements to acquire a 10% stake in Rongsheng Petrochemical, a company listed on the Shenzhen Stock Exchange of China, for 24.6 billion yuan (about 3.6 billion US dollars).
In addition, under the strategic plan, Saudi Aramco will supply 480,000 b/d of Arabian crude oil to Zhejiang Petrochemical Co., Ltd. (Zhejiang Petrochemical), a subsidiary of Rongsheng Petrochemical, through a long-term sales agreement.
This cooperation between the two parties is also a further deepening of cooperation after the signing of a series of cooperation agreements between the two parties in March 2023, marking an important step towards investment cooperation between the two parties in cross-border entity projects.
