Aramco makes purchases in China securing customers for its oil
The strategic expansion policy of the large Saudi oil group Aramco continues. After the acquisition of a share of the US EIG, also active in the extraction of natural gas in Australia, it is now turning towards China.
The company has signed a memorandum of understanding (MoU) with Shandong Yulong Petrochemical and its owners Nanshan Group, Shandong Energy Group, “to facilitate discussions” on the possible acquisition of a 10% stake in the Chinese petrochemical firm, Saudi said Aramco on October 11th. In this way, with these investments, a secure clientele is ensured.
Aluminum smelter Nanshan Group and mining group Shandong Energy Group hold a 51% and 46.1% stake in Shandong Yulong, respectively.
The petrochemical company "is completing construction" of its 400,000 bbl/d refinery and petrochemical complex in eastern China's Shandong province, Saudi Aramco said. A huge complex which, obviously, is of interest to a large crude oil producer like Aramco.
Under the memorandum of understanding, the Saudi energy firm, which is the world's largest crude oil exporter, said it "could supply Shandong Yulong with crude oil and other raw materials."
The possible deal is subject to due diligence, negotiation of transaction documents and necessary regulatory clearance, it added.
Saudi Aramco in December last year signed a memorandum of understanding with Shandong Energy Group to collaborate on “integrated refining and petrochemical opportunities” in the eastern region.
The project in Longkou, Yantai City, is expected to produce 3 million tons/year of ethylene and 3 million tons/year of mixed xylenes.
The complex will also produce monoethylene glycol (MEG), polyethylene (PE), polypropylene (PP), ethylene vinyl acetate (EVA) and acrylonitrile butadiene styrene (ABS), among others. All basic products for the manufacturing industry. .
In September, Saudi Aramco announced it was interested in acquiring a 10% stake in China's Jiangsu Shenghong Petrochemical Industry Group, a wholly owned subsidiary of Eastern Shenghong.
Shenghong Petrochemical owns and operates a 320,000 bbl/d integrated refinery and petrochemical complex, a methanol to olefins and derivatives complex, as well as a purified terephthalic acid (PTA) plant at the Xuwei Petrochemical Industrial Park in Jiangsu Province.
These possible strategic stake acquisitions followed the completion of a $3.4 billion stake purchase in Rongsheng Petrochemical in July.
Rongsheng owns a 51% stake in ZPC, whose complex has the capacity to process 800,000 bbl/day of crude oil and 4.2 million tonnes/year of ethylene.
So Aramco is buying a series of minority, but not secondary, shares in various Chinese refining and chemical production complexes, thus ensuring outlet channels for its raw product. Do you perhaps fear a crisis linked to excess production in the future?
Thanks to our Telegram channel you can stay updated on the publication of new Economic Scenarios articles.
The article Aramco makes purchases in China securing customers for its oil comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/aramco-fa-acquisti-in-cina-assicurando-clientela-per-il-proprio-petrolio/ on Thu, 12 Oct 2023 15:42:13 +0000.