Saudi Aramco has announced new agreements with its key Chinese partners, Rongsheng Petrochemical Co. and Hengli Group Co. This announcement coincides with Chinese senior delegation’s visit to the Kingdom, led by Premier Li Qiang.
In a press release, the Saudi oil giant said that these agreements boost Aramco’s contribution to China’s long-term energy security and development and promote China’s participation in the Kingdom’s economic growth, in addition to enhancing collaboration in developing new technology.
Saudi-Chinese Collaboration
Commenting on the new agreements, Aramco Downstream President, Mohammed Y. Al Qahtani, said: “The signing of these agreements reaffirms our belief in the long-term, mutual benefits that can arise from Aramco’s close collaboration with our Chinese partners.”
Moreover, he stressed China’s importance to Aramco’s global downstream growth strategy, expressing his aspirations to unlock new opportunities in this crucial market.
“These agreements reflect our collective intention to elevate our relationships in vital sectors to advance our downstream objectives, contribute to both China’s and Saudi Arabia’s vibrant energy and petrochemicals sectors, and help develop future technology solutions,” Al Qahtani added.
Agreement with Rongsheng
Aramco’s new agreements include preliminary documentation relating to a Development Framework Agreement with Rongsheng Petrochemical Co. Ltd. (Rongsheng). It addresses the potential joint development of an expansion of Saudi Aramco Jubail Refinery Company (SASREF) facilities.
This follows a Cooperation Framework Agreement announced in April 2024 between Aramco and Rongsheng related to a joint venture in SASREF, as well as significant investments in the Saudi and Chinese petrochemical sectors.
The agreement involves Rongsheng’s acquisition of a 50% stake in SASREF, and the development of a liquids-to-chemicals expansion project at SASREF. It also includes Aramco’s potential acquisition of a 50% stake in Rongsheng affiliate Ningbo Zhongjin Petrochemical Co. Ltd. (ZJPC), and participation in ZJPC’s expansion project.
Agreement with Hengli Group
Aramco’s second agreement is a Strategic Cooperation Agreement with Hengli Group Co., Ltd. It advances discussions related to Aramco‘s potential acquisition of a 10% stake in Hengli Petrochemical Co., Ltd., contingent upon completion of due diligence and regulatory review.
The agreement follows a Memorandum of Understanding (MoU) singed in April 2024 on the proposed transaction.
Enhancing Saudi-Chinese Relations
In a welcoming ceremony on Wednesday, the Saudi Crown Prince and Prime Minister, Mohammed bin Salman, received the Chinese Premier, Li Qiang, at the Royal Court in Riyadh, reported the Saudi Press Agency (SPA).
Both leaders chaired the fourth Saudi-Chinese High-Level Committee. They explored aspects of mutual cooperation between China and Saudi Arabia across various fields. These include politics, economy, security, energy, investment, technology and culture. They also discussed the latest regional and international developments and efforts made to address them.
Li arrived in Riyadh on Tuesday on an official visit, with a senior Chinese delegation to participate in the fourth Saudi-Chinese High-Level Committee, at the invitation of the Saudi Crown Prince, reported Xinhua.
Upon his arrival, Li expressed his aspiration for both sides to deepen their cooperation to further harmonize their development strategies and enhance bilateral relations.
