Aramco Downstream President highlights win-win opportunities to collaborate with Chinese partners

Aramco recently signed a cooperation framework agreement that envisions Rongsheng’s potential acquisition of a 50% percent stake in Saudi Aramco Jubail Refinery Company (SASRAF).

The agreement laid the groundwork for the development of a liquids-to-chemicals expansion project at SASREF, in addition to Aramco’s potential acquisition of a 50% stake in Rongsheng affiliate Ningbo Zhongjin Petrochemical Co. Ltd. (ZJPC) and participation in ZJPC’s expansion project.

Mohammed Y. Al Qahtani, Aramco Downstream President, recently appeared in an exclusive TV interview with CNBC Arabia, during which he highlighted the MOU recently signed with Rongsheng, Aramco’s downstream expansion and investment projects in China, the long-term relations with Chinese partners, and the commitment to China’s energy security.

Potential agreement reached with Chinese partners

A cooperation agreement was signed between Aramco and Rongsheng Petrochemicals, wherein Rongsheng acquired a 50% stake of the Aramco Jubail Refinery Co. (SASREF), with a capacity of 300,000 barrels per day. This agreement also established a joint project to support the expansion of liquids-to-chemicals conversion at SASREF in the Kingdom, in addition to Aramco’s potential acquisition of a 50% stake in Rongsheng affiliate Ningbo Zhongjin Petrochemical Co. Ltd. (ZJPC) and participation in ZJPC’s expansion project.

Additionally, Aramco signed an MoU with Hengli Group in China to acquire a 10% stake in a petrochemical company owned by the Chinese group, which operates a refinery with a capacity of 400,000 barrels per day and an integrated chemicals complex.

These agreements align with Aramco's strategy to expand its presence in the Chinese downstream sector, develop its program for converting liquids into chemicals and also secure long-term crude oil supply agreements.

Downstream expansion in Asia, China in particular

Asia represents a major market for oil, gas and related products and is an important strategic market for the Kingdom. Our presence in Asia dates back nearly half a century, when Aramco launched its pioneering joint ventures in the downstream sector in South Korea, China and Japan, followed by additional projects in various other countries.
At Aramco, we seek to expand our integrated operations in downstream in high-growth economies like China, India and Southeast Asia in general. This supports the goal of increasing our liquids-to-chemicals throughput to 4 million barrels per day by 2030. We also aim to maintain our current partnerships in countries that rely on crude oil imports, such as Japan and South Korea.

Long-standing relations with China

Undoubtedly, China holds strategic importance for the growth of Aramco's businesses in Asia. Over the years, the Company has intensified its efforts in order to meet China's energy needs. We have supplied nearly 1.8 million barrels per day of crude oil to China, in addition to new low-carbon products, chemicals and other materials.

In line with Saudi Vision 2030 as well as China's Belt and Road Initiative, we expect additional investments and an enhanced presence to meet the demand for refined products, chemicals and lubricants. This also includes entering into new partnerships in logistics, procurement and supply chain, among other areas of investment.

Investment and commitment to China’s energy security

Aramco has made significant progress in its investment projects in China. For example, we have announced last year a number of important partnerships with Chinese energy companies in order to expand our presence in this market.

In March of the same year, our joint venture, Huajin Aramco Petrochemicals Company (HAPCO), with a 30% ownership stake, launched construction work to build an integrated refinery and petrochemical complex in the Chinese city of Pangjin, valued at USD 11.8 billion.

We have also acquired a 10% stake in Rongsheng Petrochemicals last year, worth USD 3.4 billion, enabling Aramco to supply 480,000 barrels per day of crude oil under a long-term sales agreement.

In October 2023, we signed an MoU to acquire a 10% strategic ownership stake in Shandong Yulong Petrochemicals.

At the beginning of this year, SABIC announced its final investment decision for the SABIC Fujian Petrochemicals Complex project, which is being constructed in the Fujian Province, China. SABIC holds a 51% ownership stake in this project.

The investments of the project amount to approximately USD 6.4 billion, making it the largest foreign investment in the Fujian Province.

These strategic partnerships will significantly strengthen our presence in the downstream sector in China and support our goal of locating new avenues for growth.

Aramco is one of the most prominent direct investors in China and our role goes beyond investment; we aspire to be a key partner in China's economic development journey, leveraging new opportunities on the horizon.