Aramco acquires 10% stake in Rongsheng Petrochemical
Aramco, has signed definitive agreements to acquire a 10% interest in Shenzhen-listed Rongsheng Petrochemical Co. Ltd. (“Rongsheng”) for RMB 24.6 billion ($3.6 billion at current exchange rates), in a deal that would significantly expand its downstream presence in China.
Through the strategic arrangement, Aramco would supply 480,000 barrels per day (bpd) of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co. Ltd (ZPC), under a long-term sales agreement. Aramco Overseas Company (“AOC”), a wholly-owned subsidiary of Aramco, will acquire the interest in Rongsheng.
Among other assets, Rongsheng owns a 51% equity interest in ZPC, which in turn owns and operates the largest integrated refining and chemicals complex in China with a capacity to process 800,000 bpd of crude oil and to produce 4.2 million metric tons of ethylene per year.The investment would anchor an important association between Aramco, Rongsheng and ZPC, which operates one of the world’s most state-of-the-art chemical conversion assets.
The transaction involves an off-market secondary sale of Rongsheng shares by majority shareholder Zhejiang Rongsheng Holding Group, with potential for future collaboration between the parties in trading, refining, chemicals production and technology licensing. The transaction is expected to close by the end of 2023, and is subject to regulatory approvals.
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