Saudi Aramco acquires 10% of a refinery in China

Isbel Lázaro.

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Saudi Aramco

Inspenet, October 18, 2023.

Saudi Aramco has entered talks with the aim of acquiring a 10% stake in Shandong Yulong Petrochemical Co , marking a further step in the state oil giant’s investments in China.

In this sense, the company has formalized a memorandum of understanding (MoU) with Nanshan Group, Shandong Energy Group and Shandong Yulong, with a view to exploring the possible acquisition of a 10% stake in this Chinese company. This MoU is intended to facilitate discussions related to the potential acquisition of a 10% strategic stake by Aramco, as reported in a statement issued by the Saudi group.

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The role of Saudi Aramco

Under the terms of the preliminary agreement, Aramco would be in a position to supply crude oil and other raw materials to Shandong Yulong. However, it is important to note that the completion of the deal is dependent on due diligence processes, negotiation of transaction documents and obtaining the necessary regulatory approvals.

Mohammed Y. Al Qahtani, President of Aramco Downstream, stated: “ Our company values ​​Shandong for its current strength and future prospects . We believe this collaboration has the potential to enable all parties to contribute to China’s energy security and development and help navigate the energy transition .”

Shandong Yulong is currently in the final stages of construction of its extensive refining and petrochemical complex in Longkou, a city located in Yantai, east China’s Shandong province. This Longkou petrochemical complex, owned by Shandong Yulong, has been designed with the capacity to process approximately 400,000 barrels of crude oil per day (bpd) and to generate a wide range of petrochemical products and derivatives.

Under the terms stipulated in the MoU, Aramco would be tasked with supplying crude oil and other raw materials to the new Shandong Yulong refining and petrochemical complex. Additionally, last month, Saudi Aramco signed a framework agreement with Jiangsu Eastern Shenghong with the possibility of acquiring a 10% stake in Jiangsu Shenghong Petrochemical Industry Group.

It should be noted that Jiangsu Shenghong is a wholly owned subsidiary of Eastern Shenghong, and the completion of the agreement depends on due diligence, negotiation and obtaining regulatory approvals.


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