Saudi Aramco announced a new phase of discussions with China’s Hengli Petrochemical Group to acquire a 10% stake in the Group, according to Saudi Press Agency (SPA).
Aramco, the Saudi Arabian Oil Group, has signed a memorandum of understanding with Hengli Group on April 22 over the proposed deal that would significantly boost Aramco’s presence in the global markets.
The stake is valued at about $1.5 billion, reported Bloomberg.
This collaboration signifies “Aramco’s strategy to expand its downstream presence in key high-value markets, advance its liquids-to-chemicals program, and secure long-term crude oil supply agreements,” Aramco said in a statement.
Aramco Downstream President Mohammed Al Qahtani stated that the deal enhances the company’s ambitious goals to explore new horizons in top-level markets and advance its liquids-to-chemicals strategy.
Hengli Petrochemical owns and operates 400,000 barrels per day refinery. It also possesses an integrated chemicals complex in China’s Liaoning Province and several facilities in the provinces of Jiangsu and Guangdong as well.
This deal would be the latest one in a wide range of Aramco’s agreements with Chinese oil & gas refining companies.
In July 2023, it completed a deal valued at $3.4 billion to acquire a 10% stake in China’s Shenzhen-listed Rongsheng Petrochemical, according to Forbes Middle East.
Furthermore, it agreed to supply 480,000 barrels per day (bpd) of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co. Ltd.
In January 2024, Aramco subsidiary SABIC unveiled plans for a joint venture with state-owned Fujian Fuhua Gulei Petrochemical. They will cooperate to build a petrochemical complex in southeastern China’s Fujian province, with an expected cost of $6.4 billion.
In March, Saudi Aramco’s President and CEO Amin Nasser said the company is dedicated to bolster China’s long-term energy security and attract further investment within the country.
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