ZHOUSHAN, China/SINGAPORE: State oil giant Saudi Aramco signed
an agreement on Thursday to invest in a refinery-petrochemical
project in eastern China, part of its strategy to expand in
downstream operations globally.
The memorandum of understanding between the company and Zhejiang
province included plans to invest in a new refinery and co-operate
in crude oil supply, storage and trading, according to details
released by the Zhoushan government after a signing ceremony in the
city south of Shanghai.
Zhejiang Petrochemical, 51 percent owned by textile giant Zhejiang
Rongsheng Holding Group, is building a 400,000-barrels-per-day
refinery and associated petrochemical facilities that was expected
to start operations by the end of this year.
This is the third such project in China that Saudi Aramco has set
its sight on as it seeks to lock in long-term outlets for its crude
oil and produce fuel and petrochemicals to meet rising demand in
Asia and cushion the risk of a slowdown in oil consumption.
Last month, Saudi Aramco signed a long-term deal with the Zhejiang
project’s operator Zhejiang Rongsheng to supply crude oil.
The oil giant had not yet finalized the size of its stake in the
project and still needed to complete due diligence, Aramco’s
Senior Vice President of Downstream, Abdulaziz Al-Judaimi, said on
the sidelines of the event.
Saudi Aramco expects to supply 170,000 barrels per day of Saudi
crude to the refinery in Zhoushan when it starts operations, he
The first crude carrier supplying the refinery should arrive in
December or January, depending on when the project starts, he
Aramco also owns part of the Fujian refinery-petrochemical plant
with Sinopec and Exxon Mobil Corp, and has plans to build a
300,000-bpd refinery with China’s Norinco. It is also in talks
with PetroChina to invest in a refinery in Yunnan.
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Source: FS – All-News-Economy
Saudi Aramco to invest in refinery-petrochemical project in east China