SINGAPORE (ICIS)--Saudi Aramco continues its quest for downstream petrochemical investments in the world’s second-biggest economy, adding Hengli Petrochemical in a list of target companies in which the global energy giant intends to acquire a strategic stake.
The acquisitions in China are in line with Aramco’s Vision 2030 of expanding its downstream business.
Aramco is currently in discussion to acquire a 10% stake in Hengli Petrochemical as the companies signed a memorandum of understanding (MOU) on 22 April covering supply of crude and raw material, product sales and technology licensing.
Hengli Petrochemical owns and operates a refinery and petrochemical complex at Liaoning province with 400,000 bbl/day of refining and 1.5 million tonnes/year ethylene capacities.
The Chinese producer also operates several chemical plants in Jiangsu and Guangdong provinces.
The deal "aligns with Aramco’s strategy to expand its downstream presence in key high-value markets, advance its liquids-to-chemicals program, and secure long-term crude oil supply agreements", Aramco said in a statement on 22 April.
Since 2022, Aramco has embarked on major investments in China, which involved taking strategic stakes in companies with major petrochemical projects under way.
| Chinese companies | Planned investments | Date of announcement | Remarks |
| Hengli Petrochemical | 10% stake | 22 Apr 2024 | |
| Rongsheng Petrochemical | Cross acquisition talks - Rongsheng to acquire 50% stake in Saudi Aramco Jubail Refinery Co (SASREF); Aramco to take a maximum 50% stake in Rongsheng’s Ningbo Zhongjin Petrochemical | 2 Jan 2024 | To jointly develop Zhongjin’s upgrading/expansion and a new advanced materials project in Zhoushan |
| Shandong Yulong Petrochemical | 10% stake | 11 Oct 2023 | Shandong Energy is currently building a refining and petrochemical complex in Yantai called Shandong Yulong Petrochemical - a joint venture project with Chinese conglomerate Nanshan Group |
| Shenghong Petrochemical | 10% stake | 27 Sept 2023 | |
| Rongsheng Petrochemical | 10% stake | 27 Mar 2023 | Deal completed in Jul ’23 |
| Huajin Aramco Petrochemical Co (HAPCO) | a $12 billion joint venture, Aramco holds 30% | 11 Mar 2022, final investment decision made | Project broke ground in Mar ’23; to come on stream in 2026 |
Aramco CEO Amin Nasser in late March indicated that the company intends to continue making further investments in China’s chemicals sector with local partners, noting that the country has a "vitally important" place in the company’s global investment strategy.
The energy giant aims to increase its liquids-to-chemicals throughput to 4 million barrels per day by 2030, which will require a wider footprint in China, the world’s biggest chemical market, analysts said.
The investments will fuel further growth in the Chinese economy, they added.
Focus article by Fanny Zhang
Thumbnail image: The Guoyuan Port Container Terminal in Chongqing, China, on 29 February 2024. (Costfoto/NurPhoto/Shutterstock)