Saudi Arabia Becoming Major Oil Refiner in China

April 2, 2023, 2022 (EIRNS)—According to a March 26 statement, Saudi Aramco will invest $10 billion in building an oil refining and petrochemical complex in China, to operate by 2026 with 300,000 barrels/day of crude, with Aramco providing 201,000 barrels per day to the refinery. An Aramco official, Mohammed Al-Qahtani, is quoted: “This important project will support China’s growing demand across fuel and chemical products. It also represents a major milestone in our ongoing downstream expansion strategy in China and the wider region, which is an increasingly significant driver of global petrochemical demand.” Aramco and joint venture partners NORINCO Group and Panjin Xincheng Industrial Group plan to start construction of a major integrated refinery and petrochemical complex located in Panjin City, Liaoning Province, northeast China.

Meantime, on March 27, Aramco announced that it has signed definitive agreements to acquire a 10% interest in Shenzhen-listed Rongsheng Petrochemical Co. Ltd. (“Rongsheng”) for RMB24.6 billion ($3.6 billion), in a deal that would significantly expand its downstream presence in China.

Through the strategic arrangement, Aramco would supply 480,000 barrels per day of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co. Ltd (ZPC), under a long-term sales agreement. Aramco Overseas Company will acquire the interest in Rongsheng.

Among other assets, Rongsheng owns a 51% equity interest in ZPC, which in turn owns and operates the largest integrated refining and chemicals complex in China with a capacity to process 800,000 bpd of crude oil and to produce 4.2 million metric tons of ethylene per year.