Mar 28, 2023 (China Knowledge) - Aramco, one of the world’s leading integrated energy and chemicals companies, has signed definitive agreements to acquire a 10% interest in Shenzhen-listed Rongsheng Petrochemical Co. Ltd (002493) for RMB 24.6 billion (USD 3.6 billion at current exchange rate). The deal offers both parties a significant expansion in downstream offering in the global marketplace for petrochemicals.
With behemoth refining capacity of over 40 million T/A of Rongsheng Petrochemical this strategic arrangement could see Aramco’s supply 480,000 barrels per day (bpd) of Arabian crude oil to Rongsheng subsidiary Zhejiang Petroleum and Petrochemical 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 petrochemicals complex in China with a capacity to process 800,000 bpd of crude oil and production of 4.2 million metric tons of ethylene per year.
Mohammed Y. Al Qahtani, Aramco Executive Vice President of Downstream, said: “This announcement demonstrates Aramco’s long-term commitment to China and belief in the the Chinese petrochemicals sector. It is an important acquisition for Aramco in a key market, supporting its growth ambitions and advancing its liquids to chemicals strategy. Aramco also agrees to secure a reliable supply of essential crude to one of China’s most important refiners.”
Li Shuirong, Rongsheng Chairman, said: “This strategic co-operation will take Rongsheng’s long-term friendship and mutual trust to a new level, and paves the way for a bright future for the high-quality development of the world’s petrochemicals industry”. Li believes Aramco’s involvement will greatly help Rongsheng implement its petrochemical growth strategy.
The investment would anchor an important association between Aramco, Rongsheng and ZPC, which operates one of the world’s most state-of-the-art chemical conversion assets.
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. The transaction is expected to close by the second half of 2023, and is subject to regulatory approvals.
Yesterday, Rongsheng’s shares price rose more than 7%, and hit 10% upper trading limit during market opening today.
Copyright © 2018 www.chinaknowledge.com
Send feedback or comments to: firstname.lastname@example.org
For more news, financial weekly reports, business guides to China and other premium information, subscribe to China Knowledge today: www.chinaknowledge.com
To access our page on Bloomberg, type CKFI