Rongsheng and Saudi Aramco to exchange equity in strategic partnership
On January 2, 2024, Rongsheng Petrochemical Co., Ltd., one of China’s leading petrochemical companies based in Hangzhou, Zhejiang Province, and Aramco, the global energy and chemical powerhouse based in Saudi Arabia, have signed a memorandum of understanding in Dhahran, Saudi Arabia, marking a significant step in their transnational investment cooperation. This agreement builds on the series of cooperation agreements signed in March 2023, deepening the partnership between these two industry giants.
Under the memorandum, Rongsheng Petrochemical and Saudi Aramco plan to acquire equity interests in each other’s subsidiaries. Rongsheng Petrochemical is set to acquire a 50% stake in Saudi Aramco Jubail Refinery Company (SASREF), with plans to enhance refining and chemical production capacity, product flexibility, and operational complexity.
Concurrently, Saudi Aramco is discussing the acquisition of up to 50% equity in Ningbo Zhongjin Petrochemical Co., Ltd., a subsidiary of Rongsheng Petrochemical. This move includes joint development efforts to upgrade and expand Zhongjin Petrochemical’s existing equipment and the Rongsheng New Materials (Zhoushan) project.
Saudi Aramco stands as a leading integrated energy and chemical company, producing about one-eighth of the world’s crude oil and actively developing new energy technologies. Rongsheng Petrochemical operates the world’s largest single refinery, the 40-million-ton Zhejiang Petrochemical refining and chemical integration project. It is a key player in polyester and new energy materials in China and Asia, holding the title of the world’s largest manufacturer of PX, PTA, and other chemical products.
Strategic implications
This collaboration will provide Rongsheng Petrochemical with more stable and competitive petrochemical raw materials, advanced chemical technology, and a globally coordinated industrial system. Additionally, Rongsheng’s expertise in large-scale refining and chemical integration projects will support Saudi Aramco’s strategic expansion in the chemical industry chain.
