Saudi Aramco signed a preliminary agreement with China’s Zhejiang Free Trade Zone as the company looks to acquire a 9 per cent stake in an integrated refining and chemicals complex in the province, as part of its downstream push.
The memorandum of understanding will also include a long-term crude oil supply agreement and allow Aramco to use the storage at the Zhejiang Petrochemical to supply clients in Asia.
Saudi Aramco, which produces and sells crude on behalf of the kingdom has begun to increasingly deploy resources towards developing integrated refining and chemicals schemes at home as well as abroad, as it looks to earn more from the sale of products, which have large markets in Asia.
The latest agreement strengthened Aramco’s participation in a 400,000 barrel-per-day Zhoushan greenfield petrochemical scheme, while allowing for flexibility in investment across other areas of the value chain, the company said in a statement.
Aramco will look at refining and chemicals, storage as well as trading in crude and natural gas in the free zone.
During the visit of Saudi Prince Mohammed bin Salman to Beijing earlier this year, Aramco signalled interest in entering China’s retail fuel segment following an agreement with Zhejiang Energy, which includes building up a network over five years in the same province. The retail segment will eventually be integrated with the Zhejiang Petrochemical complex.
The Zhejiang Petrochemical facility in which Aramco is invested includes a newly built 400,000 bpd refinery with a 1.4 million tonne per annum ethylene cracker as well as a 5.2 million tonne per annum aromatics unit.
