Aramco acquires 10% of China’s Rongsheng for $3.6 bln

The signing ceremony 

Aramco signed definitive agreements to acquire a 10% interest in Shenzhen-listed Rongsheng Petrochemical Co. Ltd.  for RMB 24.6 billion ($3.6 billion at current exchange rates).

The deal will significantly expand Aramco’s downstream presence in China, the world’s largest oil exporter said in an emailed statement to Argaam.

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 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.

Aramco expects to close the transaction by the end of 2023 after obtaining regulatory approvals.

Combined, the partnership with Rongsheng and the HAPCO joint venture would see Aramco supply a total of 690,000 bpd of crude to high chemical conversion assets.

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