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Saudi energy giant Aramco, the world’s largest integrated oil and gas company, is planning to up its investment in its Chinese partner, as it expands its footprint in the country.
Aramco is in talks with Rongsheng Petrochemical to acquire a maximum 50% stake in the latter’s subsidiary Ningbo Chongjin Petrochemical, the Chinese company said in a Wednesday filing to the Shenzhen Stock Exchange.
Rongsheng, a Hangzhou-based privately-owned refiner, said it’s also discussing the possibility of taking a 50% stake in Saudi Aramco Jubail Refinery Company, the refining unit of the Saudi company, citing a memorandum of understanding the two sides had signed a day earlier.
The companies could also jointly upgrade and expand the Chinese subsidiary’s equipment and build the massive Rongsheng New Materials (Zhoushan) project, Rongsheng said.
The project will make high performance petrochemicals, such as engineering plastics, special polyesters and high-end resins that can be used in electronic devices and semiconductors, it said.
Saudi Arabia has significantly strengthened its energy ties with China since last year.
In March, Aramco agreed to buy a 10% stake in Rongsheng for 24.6 billion yuan ($3.5 billion). As part of the deal, it would supply 480,000 barrels per day of crude oil to the Chinese company.
China has also sought to grow its presence in the Middle East country.
Sinopec, the state-owned refining giant, has a joint venture with Aramco operating a refinery project in the Yanbu Industrial City in Saudi Arabia. The Yanbu Aramco Sinopec Refining Company, which has been in operation since 2016, uses 400,000 barrels per day of Arabian heavy crude oil to produce premium transportation fuels, according to the company.
Last month, Hong Kong rolled out the red carpet for Saudi elites at an investment conference. And in February 2023, the city’s chief executive, John Lee, traveled to Riyadh, where he met with the CEO of Aramco and floated the idea of a secondary listing in Hong Kong, according to a government statement.
Aramco went public in Riyadh in 2019, in what was then the biggest IPO of all time.
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