Saudi Aramco has signed three memoranda of understanding (MoUs) aimed at expanding its downstream presence in the Zhejiang province, one of the most developed regions in China. The company aims to acquire a 9% stake in Zhejiang Petrochemical’s 800,000 barrel-per-day (bpd) integrated refinery and petrochemical complex, located in the city of Zhoushan.
The first agreement was signed with the Zhoushan government to acquire its 9% stake in the project. The second agreement was signed with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, who are the other shareholders of Zhejiang Petrochemical. Saudi Aramco’s involvement in the project will come with a long-term crude supply agreement and the ability to utilize Zhejiang Petrochemical’s large crude oil storage facility to serve its customers in the Asian region.
An integral part of the project includes a third agreement with Zhejiang Energy to invest in a retail fuel network. The companies plan to build a large-scale retail network over the course of the next five years in Zhejiang province. The retail business will be integrated with the Zhejiang Petrochemical complex as an outlet for the refined products produced.
Phase I of the project will include a newly built 400,000 barrel-per-day refinery with a 1.4 million metric tonne per annum (mmtpa) ethylene cracker unit, and a 5.2 mmtpa aromatics unit. Phase II will see a 400,000 bpd refinery expansion, which will include deeper chemical integration than Phase I.