Aramco has signed definitive agreements to acquire a 10% stake in Rongsheng Petrochemical Co., Ltd., listed on the Shenzhen Stock Exchange, for CNY24.6 billion ($3.6 billion at current exchange rates).
The company said, according to a press release, that the deal will significantly further expand its presence in the refining, chemicals and marketing business in China.
She explained that the partnership includes the supply of 480,000 barrels per day of Arab crude oil to Zhejiang Oil and Petrochemical Company Limited, a subsidiary of Rongsheng Company, under a long-term sales agreement.
And it indicated that Aramco Overseas Company, a wholly owned subsidiary of Aramco, will acquire the stake in Rongsheng.
Among other assets, Rongsheng acquires a 51% stake in Zhejiang Corporation, which in turn owns and operates the largest integrated refining and chemicals complex in China with a processing capacity of 800,000 barrels per day of crude oil and production of 4.2 million metric tons of ethylene per year.
The transaction includes a secondary over-the-counter sale of Rongsheng shares by the majority shareholder, Zhejiang Rongsheng Holdings Group, with the possibility of future cooperation between the parties in business activities, refining, chemical production and technology licensing.
Aramco, in its statement, expected the deal to close by the end of 2023, after it is subject to regulatory approvals.
She added that through this partnership with Rongsheng and the Aramco Huajin joint venture, Saudi Aramco will supply a total of 690,000 barrels per day of crude oil to higher chemical conversion facilities.
Okaz (Beijing) @okaz_online