Arab News, Tue, Apr 23, 2024 | Shawwal 14, 1445
Saudi Aramco in talks to acquire 10% stake in China’s Hengli Petrochemical
Saudi Arabia:
Energy giant Saudi Aramco held talks with Chinese Hengli Group Co. to acquire a
10 percent stake in its subsidiary, subject to due diligence and required
regulatory clearances.
Aramco and Hengli Petrochemical Co. signed a
memorandum of understanding for the proposed deal. The agreement supports the
former’s strategy to increase its presence in key downstream markets, enhance
its liquids-to-chemicals initiative, and ensure long-term crude oil supply
agreements.
Last year, Aramco signed two multibillion-dollar
agreements for liquids to chemicals investments in China.
In March 2023, a deal was signed between China’s
Norinco Group and Panjin Xincheng Industrial Group to establish a joint venture
to build a refinery and petrochemical complex in China’s Liaoning province. The
initiative cost stands at approximately $12 billion.
The second agreement, signed in July, is an
acquisition of a 10 percent stake in China-based firm Rongsheng Petrochemical
Co. for $3.4 billion.
“This MoU supports our efforts to grow our global
downstream footprint. We continue to explore new opportunities in important
markets as we seek to progress in our liquids-to-chemicals strategy,” Mohammed
Al-Qahtani, Aramco’s downstream president, said in a press release.
He continued: “We look forward to forging new
partnerships and are excited by the prospect of expanding our presence in the
important Chinese market.”
Hengli Petrochemical, a controlled subsidiary of
Hengli Group, owns and operates a 400,000-barrel-per-day refinery and integrated
chemicals complex in Liaoning province, and several plants and production
facilities in Jiangsu and Guangdong provinces.
Speaking at a development forum held in March 2023
in Beijing, Amin Nasser, president and CEO of Aramco, highlighted substantial
opportunities for cooperation between Saudi Aramco and Chinese partners in
sectors aimed at reducing emissions.
“China has distinct strengths in renewables and
critical materials, while Aramco and Saudi Arabia have a clear interest in
solar, wind, hydrogen, and electrofuels. These areas have great long-term
potential, and combining our strengths could match our ambitions,” he noted.
Saudi Arabia and China are working together to
strengthen their already well-established strategic ties.
In September, the Kingdom’s minister of industry
and mineral resources held meetings with key Chinese officials in Beijing.
Bandar Alkhorayef also toured various companies and factories in different
Chinese cities as part of his trip.
He held talks with China’s Vice Minister of
Commerce Wang Shouwen, during which they discussed ways to boost economic
collaboration and trade ties, the Saudi Press Agency reported.
The top officials also discussed investment
opportunities in several economic sectors, including mining. At the time, the
Saudi minister highlighted the Kingdom’s progress in the field of industries and
mining.