Saudi Aramco to acquire stake in Zhejiang Refining, Petrochemical Complex

Saudi Aramco signed on Friday three Memorandums of Understanding (MoUs) to expand its downstream presence in one of China’s most developed regions, the Zhejiang province, the firm said in a statement.

The state-owned oil giant signed an MoU to acquire a 9 percent stake in Zhejiang Petrochemical’s 800,000 barrels per day integrated refinery and petrochemical complex, located in the city of Zhoushan.

It also signed an MoU with other shareholders of Zhejiang Petrochemical – namely Rongsheng Petrochemical, Juhua Group, and Tongkun Group.

“Saudi Aramco’s involvement in the project will come with a long-term crude supply agreement and the ability to utilize Zhejiang Petrochemical’s large crude oil storage facility to serve its customers in the Asian region,” Aramco said.

Part of the project includes a third agreement with Zhejiang Energy to invest in a retail fuel network.

The companies plan to build a large scale retail network over the course of the next five years in the Zhejiang province, to be integrated with the Zhejiang Petrochemical complex as an outlet for the refined products produced.

Commenting on the deals, 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.”

Phase I of the project will include a newly built 400,000 barrels per day refinery with a 1.4 mmtpa ethylene cracker unit, and a 5.2 mmtpa Aromatics unit. Phase II will see a 400,000 barrels per day refinery expansion, which will include deeper chemical integration than Phase I, the statement added.