saudi aramco rongsheng factory

Saudi Aramco today 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 barrels per day 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.

Saudi Aramco CEO, Amin Nasser said: “The agreements demonstrate our commitment to the Chinese market and help enhance the strategic integration of our downstream network in Asia. They will further strengthen our relationship with China and the Zhejiang province, setting the stage for more cooperation in the future.”

ZHOUSHAN, China/SINGAPORE (Reuters) - 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.

Zhejiang Petrochemical, 51 percent owned by textile giant Zhejiang Rongsheng Holding Group [ZJRSH.UL], 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.

The oil giant had not yet finalised 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, told Reuters on the sidelines of the event.

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.

2 Min ReadFILE PHOTO: Workers are seen at the damaged Saudi Aramco oil facility in Abqaiq, Saudi Arabia, September 20, 2019. REUTERS/Stephen Kalin/File Photo

SINGAPORE (Reuters) - Saudi crude oil supplies for China’s privately-run Zhejiang Petrochemical Corp will return to normal in October after a slight disruption last month following the attacks on Saudi Aramco’s facilities, two company officials said.

“There was an adjustment in September but operations are back to normal in October,” Meng Fanqiu who heads Rongsheng International Trading Co in Singapore told Reuters. The trading unit procures crude for the refinery.

Drones and missiles hit Saudi Arabia’s oil facilities on Sept. 14 and reduced output at the world’s top exporter by half. The head of Saudi Aramco’s trading arm said on Monday the company had restored full oil production and capacity to the levels they were before the attacks.

Zhejiang Petrochemical, 51% owned by Rongsheng Holdings, operates a 400,000 barrels per day refinery, built on an island off the archipelago city of Zhoushan in east China. The refinery is integrated with a petrochemical complex led by a 1.2 million-tonne per year ethylene facility.

SINGAPORE  - Saudi Aramco has signed a long-term deal with Zhejiang Rongsheng to supply crude oil to the Chinese company"s new refinery in eastern China, a source with knowledge of the matter said on Wednesday.

Rongsheng International Trading Co, the trading arm of Chinese conglomerate Zhejiang Rongsheng Holding Group, has already bought spot Omani crude ahead of the new refinery"s start-up.

Zhejiang Petrochemical, 51 percent owned by textile giant Rongsheng Holding Group, was in August awarded a quota to import 5 million tonnes of crude oil this year. The company plans to start up its 400,000-barrels-per-day refinery-petrochemical project in eastern China in late 2018.

Other buyers across Asia and Europe have also said they would cut back on purchases of Iranian oil, unleashing a burst of demand for West African and other crudes rich in distillates, such as grades from Saudi Arabia or the North Sea.

Saudi Aramco has signed agreements to acquire a 9% stake in the Zhejiang petrochemical project in the Chinese province of Zhejiang for an undisclosed price.

The Arabian company has signed a second agreement with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, the other shareholders of Zhejiang Petrochemical, the holding company of the Chinese petrochemical project.

Saudi Aramco said that its involvement in the project will come with a long-term crude supply agreement and the ability to use Zhejiang Petrochemical’s large crude oil storage facility to cater to its customers in Asia.

Saudi Aramco CEO Amin Nasser said: “The agreements demonstrate our commitment to the Chinese market and help enhance the strategic integration of our downstream network in Asia. They will further strengthen our relationship with China and the Zhejiang province, setting the stage for more cooperation in the future.”

Last week, Saudi Aramco entered into a joint venture agreement with NORINCO Group and Panjin Sincen to develop a fully integrated refining and petrochemical complex in Panjin in another Chinese province Liaoning.

The joint venture, called Huajin Aramco Petrochemical is expected to invest over $10bn to build what will be a 300 thousand barrel per day refinery, equipped with a 1.5 million metric tons per annum (mmtpa) ethylene cracker and a 1.3 mmtpa PX unit.

Saudi Aramco signed three Memoranda of Understanding (MoUs) on Friday to purchase a 9 percent stake in Chinese Zhejiang Petrochemical"s integrated refinery and petrochemical complex in the city of Zhoushan, and to invest in a retail fuel network in the eastern region of China, the Saudi state-run energy giant announced.

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, according to the statement.

Saudi Aramco and Zhejiang Energy plan to build a large-scale retail network over the course of the next five years in the province, the statement added. The retail business will be integrated with the Zhejiang Petrochemical complex as an outlet for the facility"s refined products.

Saudi Aramco CEO Amin Nasser said the agreements demonstrate the company"s commitment to the Chinese market and would help enhance the strategic integration of its downstream network in Asia.

State oil giant Saudi Aramco said it had signed an agreement with a provincial government in China to acquire a stake in the new refinery project of top industrial group Zhejiang Petrochemicals.

Abdulaziz Al Judaimi, the Senior VP (Downstream), said: "We are exploring opportunities for new refining and petrochemicals facilities, making further investments in China. Saudi Aramco has recently signed a crude oil supply agreement with Zhejiang Petrochemical (Rongsheng)."

Since 2006 to date, no one delivered more oil to China than Saudi Aramco. Helping China meet its critical energy needs shows Aramco’s commitment to key global markets," he noted.

Plans for a joint Saudi Arabia-China refining and petrochemical complex to be built in northeast China that were shelved in 2020 are now being discussed again, according tosources close to the deal. The original deal for Saudi Aramco and China’s North Industries Group (Norinco) and Panjin Sincen Group to build the US$10 billion 300,000 barrels per day (bpd) integrated refining and petrochemical facility in Panjin city was signed in February 2019. However, in the aftermath of the enduring low prices and economic damage that hit Saudi Arabia as a result of the Second Oil Price War it instigated in the first half of 2020 against the U.S. shale oil threat, Aramco pulled out of the deal in August of that year.

The fact that this landmark refinery joint venture is back under serious consideration underlines the extremely significant shift in Saudi Arabia’s geopolitical alliances in the past few years – principally away from the U.S. and its allies and towards China and its allies. Up until the 2014-2016 Oil Price War, intended by Saudi Arabia to destroy the then-nascent U.S. shale oil sector, the foundation of U.S.-Saudi relations had been the deal struck on 14 February 1945 between the then-U.S. President Franklin D. Roosevelt and the Saudi King Abdulaziz. In essence, but analyzed in-depth inmy new book on the global oil markets,this was that the U.S. would receive all of the oil supplies it needed for as long as Saudi had oil in place, in return for which the U.S. would guarantee the security both of the ruling House of Saud and, by extension, of Saudi Arabia.

After the end of the 2014-2016 Oil Price War, Saudi Arabia had not only lost the upper hand in global oil markets that it had established alongside other OPEC member states with the 1973 Oil Embargo but it had also prompted a catastrophic breach of trust with its former allies in Washington. Consequently, the U.S. changed the effective terms of 1945 to: the U.S. will safeguard the security both of Saudi Arabia and of the ruling House of Saud for as long as Saudi not only guarantees that the U.S. will receive all of the oil supplies it needs for as long as Saudi has oil in place but also that Saudi Arabia does not attempt to interfere with the growth andprosperity of the U.S. shale oil sector. Shortly after that (in May 2017), the U.S. assured the Saudis that it would protect them against any Iranian attacks, provided that Riyadh also bought US$110 billion of defense equipment from the U.S. immediately and another US$350 billion worth over the next 10 years. However, the Saudis then found out that none of these weapons were able to prevent Iran from launchingsuccessful attacksagainst its key oil facilities in September 2019, or several subsequent attacks.

Concomitant with this weakening of relations between Saudi Arabia and the U.S. came a drift towards Russia first and then China. Given the reputational damage done to the perceived power of Saudi Arabia and its OPEC brothers by their inability to destroy or disable the growing threat from U.S. shale oil to their former dominance in the global oil markets, their attempts to pull oil prices back up to levels at which they could begin to repair thedamage done to their economiesby the 2014-2016 Oil Price War towards the end of 2016 also failed. At that point, fully cognisant of the enormous economic and geopolitical possibilities that were available to it by becoming a core participant in the crude oil supply/demand/pricing matrix, Russia agreed to support the OPEC production cut deal in what was to be called from then-on ‘OPEC+’, albeit in its own uniquely self-serving and ruthless fashion, again analyzed in-depth inmy new book on the global oil markets.

Given Russia’s significant leverage in the Middle East by dint of its pivotal position in making the OPEC deal credible in terms of being able to affect global oil prices, China also began to more aggressively leverage its own power with the group and in the region by dint of its being the world’s biggest net importer of crude oil and its increasing use of checkbook diplomacy. Nowhere were the two elements more in evidence than in China’s offer to buy the entire 5 percent stake of Aramco in a private placement. This was designed to enable Saudi Crown Prince Mohammed bin Salman to save face, given hisunsuccessful attempts from 2016 to 2020to persuade serious Western investors to have any significant part in the company’s initial public offering. Shortly after the offer was made,China was referred toby Saudi’s then-vice minister of economy and planning, Mohammed al-Tuwaijri, as: “By far one of the top markets” to diversify the funding basis of Saudi Arabia. He added that: “We will also access other technical markets in terms of unique funding opportunities, private placements, panda bonds and others.” In a similar vein, andjust last year, Saudi Aramco’s chief executive officer, Amin Nasser, said: “Ensuring the continuing security of China’s energy needs remains our [Saudi Aramco’s] highest priority — not just for the next five years but for the next 50 and beyond.”

Between the end of the 2014-2016 Oil Price War and now, there have been multiple high-level visits back and forth between Saudi Arabia and China, beginning most notably with the trip of high-ranking politicians and financiers fromChina in August 2017 to Saudi Arabia, which featured a meeting between King Salman and Chinese Vice Premier, Zhang Gaoli, in Jeddah. During the visit, Saudi Arabia first mentioned seriously that it was willing to consider funding itself partly in Chinese yuan, raising the possibility of closer financial ties between the two countries. At these meetings, according to comments at the time from then-Saudi Energy Minister, Khalid al-Falih, it was also decided that Saudi Arabia and China would establish a US$20 billion investment fund on a 50:50 basis that would invest in sectors such as infrastructure, energy, mining, and materials, among other areas. The Jeddah meetings in August 2017 followed a landmark visit to China by Saudi Arabia’s King Salman in March of that year during which around US$65 billion of business deals were signed in sectors including oil refining, petrochemicals, light manufacturing, and electronics.

Later, the first discussions about the joint Saudi-China refining and petrochemical complex in China’s northeast began, with a bonus for Saudi Arabia being that Aramco was intended to supply up to 70 percent of the crude feedstock for the complex that was to have commenced operation in 2024. This, in turn, was part of a multiple-deal series that also included three preliminary agreements to invest in Zhejiang province in eastern China. The first agreement was signed to acquire a 9 percent stake in the greenfield Zhejiang Petrochemical project, the second was a crude oil supply deal signed with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, and the third was with Zhejiang Energy to build a large-scale retail fuel network over five years in Zhejiang province.

This latest Aramco-Norinco-Panjin Sincen deal, though, carries with it even broader ramifications of a much more overtly testing nature for U.S. President Joe Biden in terms of where he draws the line on supposed allies blurring trade considerations and security considerations. All Chinese companies function as part of the State apparatus – without any exception – and Norinco has the added troubling element for the U.S. that it is one of China’s major defense contractors, specializing in the full range of research, development, and production of military equipment, technology, systems, and weapons. This runs alongside ongoing concerns from Washington about Saudi Arabia’s on again-off again agreement with Russia tobuy its S-400 missile defense system, and much more recent news in December 2021 that Saudi Arabia is now actively manufacturing itsown ballistic missiles with the help of China.

Saudi Aramco has signed a Memorandum of Understanding (MoU) with China’s Zhejiang provincial government to acquire a stake in Zhejiang Petrochemical’s new oil refinery project. The size of the stake has not yet been finalized, pending due diligence.

“We are exploring opportunities for new refining and petrochemicals facilities, making further investments in China,” said Saudi Aramco’s Senior Vice President for Downstream Abdulaziz Al Judaimi.

Zhejiang Petrochemical, which is 51% owned by textile giant Zhejiang Rongsheng Holding Group, is building a 400,000-barrel-per-day (bpd) oil refinery and associated petrochemical facilities that were expected to start operations by the end of this year.

The MoU also includes cooperating in crude oil supply, storage, and trading. Last month, Saudi Aramco signed a long-term deal with the Zhejiang project’s operator Zhejiang Rongsheng to supply crude oil to the refinery. Saudi Aramco expects to supply 170,000 bpd of Saudi crude oil to the refinery in Zhoushan in eastern China when it starts operations.

Saudi Arabia’s state-owned oil and gas company Saudi Aramco is working to achieve a better balance between its upstream and downstream business. The company’s downstream strategy seeks to enhance the value of the hydrocarbon resource base by targeting increased horizontal and vertical integration across the hydrocarbon value chain. The successful execution of the downstream strategy would deliver a world-leading, strategically integrated downstream network and a robust portfolio that is more resilient to market turbulence.

Aramco also owns part of the Fujian refinery-petrochemical plant with Sinopec and ExxonMobil 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.

Abu Dhabi National Oil Company (ADNOC) has signed a broad framework agreement with China’s Rongsheng Petrochemical to explore domestic and international growth opportunities in support of ADNOC’s 2030 growth strategy.

The companies will examine opportunities in the sale of refined products from ADNOC to Rongsheng, downstream investment opportunities in both China and the United Arab Emirates (UAE) and the supply of liquified natural gas (LNG) to Rongsheng.

Under the terms of the deal, the companies will also study chances to increasing the volume and variety of refined product sales to Rongsheng as well as ADNOC’s participation as the China firm’s strategic partner in refinery and petrochemical projects. This could include an investment in Rongsheng’s downstream complex.

In return, Rongsheng will also look at investing in ADNOC’s downstream industrial ecosystem in Ruwais, UAE, including a proposed gasoline-to-aromatics plant as well as reviewing the potential for ADNOC to supply LNG to Rongsheng for use within its own complexes in China.

Rongsheng’s chairman Li Shuirong added that the cooperation will ensure that its project, which will have a refining capacity of up to 1 million bbl/day of crude oil, has adequate supplies of feedstock.

The Chinese group holds a 51% stake in Zhejiang Petroleum & Chemical Company (ZPC), which is currently building a major refining and petrochemical complex in Zhoushan, Zhejiang province, to comprise two oil refineries and two 1.4 million t/y ethylene plants.  The first phase is due for completion in 2020. Saudi Aramco agreed in February 2019 to take over the Zhoushan government’s 9% share in the project.

State oil giant Saudi Aramco plans to ink an agreement later on Thursday to take a stake in a refinery-petrochemical project in eastern China, a senior official said on Thursday.

"We will have a signing ceremony later today with the Zhejiang government to invest in the Zhejiang refinery-petrochemical project," Aramco"s Senior Vice President of Downstream, Abdulaziz al-Judaimi told an industry event.

Zhejiang Petrochemical, 51 percent owned by textile giant Rongsheng Holding Group, plans to start its 400,000-barrels-per-day refinery-petrochemical project in eastern China in late 2018.

(Yicai Global) Feb. 25 -- The national petroleum and oil giant of Saudi Arabia will purchase a minority stake in Zhejiang Petrochemical along with two other deals to expand its downstream business in eastern China.

Saudi Arabian Oil Company, also known as Saudi Aramco, penned three memorandums of understanding in eastern Zhejiang province, one of them with the Zhoushan municipal government involving a purchase of a 9 percent stake in ZP, the Asian division of the Dhahran-based parent posted on its official WeChat account on Feb. 23.

The deals show Saudi Aramco"s commitment to the Chinese market and will help to enhance the strategic integration of its downstream business network in Asia, Amin Nasser, the president and chief executive of Saudi Aramco said in the post.

Saudi Aramco will provide ZP with crude oil for refining in the latter"s new plant in Zhoushan for the long-term while making use of ZP"s large storage facilities to serve customers in Asia. ZP aims to provide 6 million tons of refined oil each year at the project in its hometown with with an investment of CNY173 billion (USD25.8 billion). The target firm can process 800,000 barrels of crude oil a day, Saudi Aramco"s post added.

Saudi Aramco also agreed with Zhejiang Provincial Energy Group to establish a large refined oil retail network in Zhejiang province within five years to integrate resources and make the Chinese firm into a competitive distribution channel.

Founded in 2015, ZP has a mixed ownership structure. Privately owned Rongsheng Petrochemical has a 51 percent stake while the two state-owned shareholders include Zhejiang Juhua Investment with a 20 percent stake as well as Zhoushan Ocean Comprehensive Development and Investment with a 9 percent stake.