Aramco discusses possible acquisition of 10% stake in Shandong Yulong

The signing ceremony

Saudi Arabian Oil Co. (Saudi Aramco) signed today, Oct. 11, a memorandum of understanding (MoU) with Nanshan Group Co. Ltd., Shandong Energy Group Co. Ltd., and Shandong Yulong Petrochemical Ltd. to facilitate discussions on Aramco's possible acquisition of a 10% strategic stake in Shandong Yulong.

This is subject to due diligence, negotiation of transaction documents, and required regulatory clearance, Aramco said in a statement.

Shandong Yulong is currently completing the construction of a refining and petrochemicals complex capable of processing around 400,000 barrels of crude oil per day (bpd) and producing a large volume of petrochemicals and derivatives. The facilities are in Longkou, Yantai City, Shandong Province, China.

As outlined in the MoU, Aramco would potentially supply Shandong Yulong with crude oil and other feedstock, the statement added.

Mohammed Y. Al Qahtani, Aramco Downstream President, said: "As one of China's largest refining and chemical centers, Aramco values Shandong for its current strength and future prospects.

"We believe this collaboration has potential to enable all parties to contribute to China's energy security and development, and aid in navigating the energy transition. With Aramco's long track record as a reliable supplier of energy to China, and the expertise and commitment of Shandong Province, we envision a prosperous future together," he added.

The MoU signing follows last month’s framework agreement, which was signed by Saudi Aramco and Jiangsu Eastern Shenghong to facilitate discussions on Aramco’s possible acquisition of a 10% strategic equity interest in Jiangsu Shenghong Petrochemical Industry Group, a wholly-owned subsidiary of Eastern Shenghong.

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