China’s Rongsheng, Saudi Aramco in talks to buy stake in each other’s units
CHINESE privately-controlled refiner Rongsheng Petrochemical and Saudi Aramco are in talks for the Chinese company to buy a 50 per cent stake in the Saudi company’s refining unit SASREF, a filing showed on Tuesday (Jan 2).
Rongsheng is also negotiating to sell Aramco an up to a 50 per cent stake in its unit Ningbo Zhongjin Petrochemical, the Chinese company said in a statement to the Shenzhen stock exchange, citing a memorandum of understanding signed on Tuesday.
Saudi Aramco Jubail Refinery Company (SASREF), located in Jubail Industrial city, processes crude oil into petroleum products and has a production capacity of 305,000 barrels per day (bpd), its website shows.
If the SASREF stake acquisition happens, it would be the first investment by a private Chinese firm in a significant Saudi refining asset. State refining giant Sinopec is so far the only Chinese company that owns a refinery stake in Saudi Arabia.
The companies also discussed expanding the Saudi refinery and upgrading its products.
The final investment decision is pending due diligence on Ningbo Zhongjin and SASREF by the two buyers respectively, Rongsheng Petrochemical said.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Aramco said in March it had agreed to acquire a 10 per cent stake in Rongsheng, an investment attached to a 20-year crude oil supply deal with Rongsheng-controlled Zhejiang Petrochemical. The deal closed in July at a valuation of US$3.4 billion.
It has also been in talks to buy a 10 per cent stake in Shandong Yulong Petrochemical, which is building a refinery complex that can process 400,000 barrels of crude a day in eastern China’s Shandong province.
In September, Aramco announced plans to become a strategic investor in another private Chinese refiner Jiangsu Shenghong Petrochemical, which operates a 320,000 bpd refinery and petrochemical complex in the eastern province of Jiangsu.
In a separate filing to the stock exchange, Rongsheng said it plans to invest 67.5 billion yuan (S$6.3 billion) in new materials at its base Zhoushan in east China that makes products such as high-performing plastic material ethylene vinyl acetate (EVA) and polyolefin elastomers used in solar panels. REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Energy & Commodities
Gold prices set for second weekly gain on Fed rate outlook
Oil up after US economic data strengthens rate cut expectations
Chevron prepares for North Sea exit after more than 55 years
Red Sea disruptions are splitting global LNG trade into regions
Gold prices edge higher as US dollar, yields soften
Commodities hit highest in a year, posing new inflation threat