Saudi Aramco to acquire stake in Chinese petrochemical refinery

Saudi Aramco signed a memorandum of understanding on Thursday to acquire a stake in the Zhejiang Petrochemical refinery in eastern China, Reuters reported.

The agreement between the Saudi oil giant and the Zhejiang province includes plans to invest in a new refinery and cooperate in crude oil supply, storage, and trading, the agency reported, citing details released by the Zhoushan government after the signing ceremony.

Last month, Aramco signed a long-term deal with Zhejiang Rongsheng, the project’s operator, to supply crude oil.

Aramco is yet to finalize the size of its stake and still needs to carry out due diligence, said Abdulaziz al-Judaimi, senior vice president of downstream.

The company expects to supply 170,000 barrels per day of Saudi crude to the refinery in Zhoushan once operations begin, he said.

Al-Judaimi added that the first crude carrier supplying the refinery should arrive in December or January, depending on when the project starts.

Zhejiang Petrochemical is 51 percent-owned by textile giant Rongsheng Holding Group. The 400,000-barrels-per-day project was initially scheduled to start operations in late 2018.