Saudi Aramco signed three Memoranda of Understanding (MoUs) on Friday to purchase a 9 percent stake in Chinese Zhejiang Petrochemical's integrated refinery and petrochemical complex in the city of Zhoushan, and to invest in a retail fuel network in the eastern region of China, the Saudi state-run energy giant announced.
The first agreement was signed with the Zhoushan government to acquire its 9 percent share in the 800,000-barrels-per-day integrated refinery and petrochemical complex, according to the company's statement.
The second agreement was signed with Rongsheng Petrochemical, Juhua Group, and Tongkun Group - the other shareholders of Zhejiang Petrochemical.
According to the press release, phase I of the project will include a newly-built 400,000-barrels-per-day refinery with a 1.4 million-metric-tons-per-annum (mmtpa) ethylene cracker unit, and a 5.2 mmtpa aromatics unit. Phase II will see a 400,000-barrels-per-day refinery expansion, which will include deeper chemical integration than phase I, it said.
Saudi Aramco's involvement in the project will come with a long-term crude supply agreement and the ability to utilize Zhejiang Petrochemical's large crude oil storage facility to serve its customers in the Asian region, according to the statement.
The company's third MoU with Zhejiang Energy is to explore potential investment in a retail network in the eastern region of China, in addition to other related downstream investments with a view to expanding its downstream presence in the Zhejiang province.
Saudi Aramco and Zhejiang Energy plan to build a large-scale retail network over the course of the next five years in the province, the statement added. The retail business will be integrated with the Zhejiang Petrochemical complex as an outlet for the facility's refined products.
Saudi Aramco CEO Amin Nasser said the agreements demonstrate the company's commitment to the Chinese market and would help enhance the strategic integration of its downstream network in Asia.
"They will further strengthen our relationship with China and the Zhejiang province, setting the stage for more cooperation in the future," he added.
By Hale Turkes