rongsheng petrochemical share price pricelist

Fair Value is the appropriate price for the shares of a company, based on its earnings and growth rate also interpreted as when P/E Ratio = Growth Rate. Estimated return represents the projected annual return you might expect after purchasing shares in the company and holding them over the default time horizon of 5 years, based on the EPS growth rate that we have projected.

Commodities & Futures: Futures prices are delayed at least 10 minutes as per exchange requirements. Change value during the period between open outcry settle and the commencement of the next day"s trading is calculated as the difference between the last trade and the prior day"s settle. Change value during other periods is calculated as the difference between the last trade and the most recent settle. Source: FactSet

Mutual Funds & ETFs: All of the mutual fund and ETF information contained in this display, with the exception of the current price and price history, was supplied by Lipper, A Refinitiv Company, subject to the following: Copyright 2019© Refinitiv. All rights reserved. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

RONGSHENG PETROCHEMICAL CO., LTD. is a China-based company principally engaged in the research, development, manufacture and distribution of chemicals and chemical fibers. The Company’s main products include aromatics, phosphotungstic acid (PTA), polyethylene terephthalate (PET) chips, terylene pre-oriented yarns (POYs), terylene fully drawn yarns (FDYs) and terylene draw textured yarns (DTYs), among others. The Company distributes its products in domestic market and to...More

Oil prices tell some of the story. Early last year, as the economy froze up and people stayed home, crude prices crashed, dragging chemical prices down with them. Petrochemical volumes, however, were relatively strong because some products, such as polyethylene, saw an uptick in demand.

For instance, more than a dozen members of the Global Top 50 have major plastics recycling initiatives. A similar number of companies are looking to make ammonia and hydrogen via water electrolysis rather than from natural gas. Still others are overhauling basic petrochemical processes to make them more energy efficient. Dow, Shell, Sabic, and BASF, for example, are developing ethylene crackers that run on renewable electricity.

Despite the year’s volatility, the survey was marked by few changes. Companies heavily laden with petrochemical operations generally saw declines in sales and fell in the ranking. Companies that make industrial gases or agricultural chemicals tended to rise.

Three companies in the Global Top 50 a year ago didn’t make it this year. Ecolab fell off the list because it divested an oil-field chemical business. SK Innovation and PTT Global Chemical were both victims of declines in petrochemical sales.

Now that it is breaking out chemical sales again, Shell rejoins the Global Top 50 this year after a 5-year hiatus. Rongsheng Petrochemical, which makes polyester chemicals, debuts this year. The former DowDuPont agricultural chemical business, Corteva Agriscience, made the cut as well.

Saudi Arabia’s state oil company, Saudi Aramco, completed its purchase of a 70% stake in the petrochemical maker Sabic in June 2020. The purchase was meant to diversify Aramco, which today depends heavily on oil and gas. But soon after the deal closed, the firms announced they were reevaluating the scope of a planned complex that was to convert 400,000 barrels per day of crude oil into 9 million metric tons (t) per year of petrochemicals. Their new, more modest plan is to build an ethylene cracker and derivatives units that will be integrated with existing Aramco refineries. In another instance of Sabic and Aramco working together, the companies shipped 40 t of ammonia to a power plant in Japan last September. The ammonia is considered “blue” because carbon dioxide emitted during its manufacture was captured and used for enhanced oil recovery and methanol production in Saudi Arabia. In another strategic move, Sabic carved out a stand-alone business that includes its polyphenylene oxide, polyetherimide, and compounding units. The company got the businesses with its purchase of GE Plastics in 2007. Sabic had sought to combine them with Clariant’s masterbatch business, but those talks broke down in 2019.

The $9.4 billion petrochemical complex that Formosa Plastics is planning in St. James Parish, Louisiana, is in hot water. It faces fierce opposition both locally from community organizations worried about pollution and nationally from environmental groups that wish to stop the mounting production of plastics. Sharon Lavigne, head of the local group Rise St. James, recently received the prestigious Goldman Environmental Prize for her efforts, a sign that the Formosa project has high-profile opposition. The project also faces practical hurdles. Notably, the US Army Corps of Engineers suspended a permit for the facility in November. Formosa Plastics had better luck in Point Comfort, Texas, where it started up an ethylene cracker and low-density polyethylene unit last year.

Most large chemical companies nowadays are plunging into plastics recycling to counter public backlash, and Lyondell­Basell Industries is at the front of the pack. CEO Bob Patel is one of the founders of the Alliance to End Plastic Waste, formed by industry to address the recycling problem. And Lyondell has its own initiatives. It and the waste management firm Suez bought the plastics recycler Tivaco and are combining it with Quality Circular Polymers, a recycling venture Lyondell and Suez started in 2018. Quality Circular has some high-profile clients. For example, Samsonite is using its resin for a line of sustainable suitcases. Meanwhile, Lyondell continues to grow its core petrochemical business, often on the cheap. In December, the firm bought, for the bargain price of $2 billion, a 50% interest in a new ethylene cracker and two polyethylene plants that the struggling Sasol had built. Similarly, it bought into an ethylene cracker joint venture already under construction in China.

While oil companies such as Shell and BP were redefining themselves as alternative energy players in recent years, ExxonMobil stuck with petroleum. The firm was taking what it considered a realistic position. Oil and gas are cheap and convenient, it argued, and would be hard to dislodge from the energy market for the next few decades. But COVID-19 hit the oil and gas business hard. ExxonMobil racked up a gaping corporate loss of $28 billion in 2020, even as its chemical unit earned an operating profit of $2.7 billion. The company is facing shareholder pressure to change, and it is starting to respond. For example, in April, it outlined a $100 billion plan to store 100 million metric tons per year of carbon dioxide in the Gulf of Mexico. The new environmental consciousness trickles down into chemicals. At a complex in France, ExxonMobil Chemical plans to host a pyrolysis plant that breaks down waste plastics into chemical raw materials. And at its Baytown, Texas, chemical facility, it is testing a plastics recycling process. Separately, in a rare move, ExxonMobil is divesting a business, selling its Santoprene thermoplastic vulcanizate operation to Celanese for $1.15 billion.

PetroChina will bring a pair of unique petrochemical projects—which cost a total of $2.5 billion—on line later this year. The company is building ethylene crackers in Tarim and Changqing, China, that will use ethane sourced from domestic natural gas fields as their feedstock. These projects wouldn’t be unusual in the US or the Middle East, where oil and natural gas are cheap and plentiful, but ethylene crackers in resource-constrained China are mostly fed with naphtha derived from imported oil. The country also sources petrochemical feedstocks from coal. Both routes to ethylene are relatively expensive and put China at a competitive disadvantage.

Hengli Petrochemical’s growth has been amazing. Last year, the company came out of nowhere to debut at 26 in the Global Top 50. In 2020, and despite the COVID-19 pandemic, the Chinese petrochemical maker’s chemical sales grew by a whopping 46%. Construction at an almost unbelievable pace is responsible for this growth. In 2020 alone, Hengli started two large production lines for purified terephthalic acid (PTA), a polyester raw material, in Dalian, China. The lines, which use technology from Invista, bring Hengli’s PTA capacity to 12 million metric tons (t) per year. In November, Hengli signed a licensing agreement, also with Invista, for two more PTA lines at its site in Huizhou, China. In addition, the company plans to build a plant in Dalian to make a biodegradable plastic from PTA, adipic acid, and 1,4-butanediol. Hengli says the plant will have 450,000 t of annual capacity, a large figure for a biodegradable plastic.

Many people would think of Dow and BASF as the technology giants in industrial chemistry. But Braskem, a Brazilian petrochemical maker, is a technological heavy hitter too. It is partnering with the University of Illinois Chicago on a route to ethylene based on the electrochemical reduction of carbon dioxide from flue gas. At its chlor-alkali complex in Maceió, Brazil, Braskem will host a pilot plant to make ethylene dichloride using a novel process developed by the start-up Chemetry. In this energy-saving process, called eShuttle, chloride ions react with cuprous chloride (CuCl) to form cupric chloride (CuCl2), which reacts with ethylene to form the polyvinyl chloride raw material. In Pittsburgh, Braskem recently completed a $10 million expansion of its technology and innovation center to allow work on recycling, 3D printing, and catalysis.

The Chinese polyurethane raw materials supplier bucked the general trend of sales decline in 2020 with a nearly 8% increase in chemical sales and a 10% rise in profits. After a weak first half of the year, demand bounced back in the second half, the company says. The COVID-19 “pandemic in China was rapidly and effectively controlled,” Wanhua Chemical says in its annual report. “Domestic market demands and the downstream export overseas were resumed rapidly, and growth of prices of chemical products was recovered.” Wanhua sought to build a beachhead in the US with a $1.25 billion project to build a methylene diphenyl diisocyanate plant in Louisiana. But US-China trade friction and a jump in construction costs appear to have prompted the firm to shelve the initiative.

Johnson Matthey’s chemical sales edged up by over 12% during its fiscal year, in part owing to strong prices for precious metals such as platinum, which the company uses to make catalytic converters. JM, however, has been trying to evolve. Similar to how big oil companies like Shell are redefining themselves as alternative energy firms, JM is trying to pivot toward batteries and hydrogen. Earlier this year, for instance, the company announced it will build a second plant, in Vaasa, Finland, for a cathode material that contains lithium, cobalt, and nickel and that will be used in lithium-ion batteries. Additionally, JM is undertaking a “strategic review” of its pharmaceutical chemical business, which makes drug ingredients.

Recent years have seen Chinese petrochemical producers, often involved in the polyester supply chain, join the Global Top 50. Hengli Petrochemical is one of those firms. And now Rongsheng Petrochemical is another. The company is one of the largest producers of purified terephthalic acid in the world, with 13 million metric tons of capacity at plants in Dalian, Ningbo, and Hainan, China. It also makes polyester resin and fiber. It is an investor in Zhejiang Petrochemical, a large oil refinery and petrochemical complex that is currently starting up.

Sustainability continues to be a focus for the Austrian petrochemical maker. In June, the company signed an agreement to buy oil from Renasci Oostende Recycling, which uses a thermal process to break down postconsumer plastic. Borealis will turn this feedstock into plastics again at its complex in Porvoo, Finland. Borealis also started up a demonstration unit at its polyethylene plant in Antwerp, Belgium, to test a heat-recovery technology developed by the start-up Qpinch. The technology is modeled on the adenosine triphosphate–adenosine diphosphate cycle in biology. Separately, Borealis put its fertilizer business up for sale in February.

Sasol ended a saga in November when it started up a low-density polyethylene plant in Lake Charles, Louisiana. The unit was the last of the plants the South African company built as part of a $12.8 billion petrochemical complex. The project went $4 billion over budget, leading to the ouster of its co-CEOs. To strengthen its balance sheet, Sasol aims to divest $6 billion in assets. To that end, the company formed a joint venture with LyondellBasell Industries to run the ethylene cracker and two polyethylene plants it built in Lake Charles, essentially selling half these operations for $2 billion. Sasol is keeping alcohols, ethylene oxide and ethylene glycol, and ethoxylation plants at the site. Separately, Sasol sold its 50% interest in the Gemini HDPE high-density polyethylene joint venture with Ineos for $400 million.

Financial Associated Press, Dec. 9, Rongsheng Petrochemical announced that on December 8, 2021, the company received the notification letter on increasing shares from the controlling shareholder Zhejiang Rongsheng Holding Group Co., Ltd. ("Rongsheng holding"), and learned that it increased its total holdings of 72351316 shares of the company through centralized trading on the stock exchange from October 26, 2018 to December 8, 2021, with an increase ratio of 1%.

The Hengli Petrochemical (Dalian) Refinery in Liaoning province also raised its throughput by 3.6% month on month to 1.7 million mt in December. This comes after the completion of the maintenance at its secondary units, according to refinery sources.

In other news, Sinopec"s Hainan Petrochemical refinery in southern China is expected to export about 50,000 mt of refined oil products in January 2022, according to a refinery source. This was down 55% from 110,000 mt planned for export in December 2021.

PetroChina"s West Pacific Petrochemical Corp. refinery will skip gasoil exports in January after skipping them in December and November due to good demand in the domestic market.

PetroChina"s flagship refinery Dalian Petrochemical in northeastern Liaoning province will raise its gasoline exports to 160,000 mt in January, according to sources with knowledge of the matter. This will be about 357% higher than its planned exports in December. Dalian will double jet fuel exports to 80,000 mt in January, from 40,000 mt last month. Dalian plans to process around 1.3 million mt of crudes in January, translating to 75% of its nameplate capacity, stable on the month.

** Sinochem has been in the process of starting up its 12 million mt/year CDU and related refining units at its Quanzhou Petrochemical facility in southern Fujian province, according to a source with knowledge of the matter Jan. 19. The refining and petrochemical units were shut at around Dec. 1, 2021 for maintenance, which lasted for about 40-50 days, according to the maintenance schedule. The refinery will likely process about 450,000 mt to 500,000 mt of crudes for the remainder of February, compared with around 1.2 million mt during normal months.

** Sinopec"s Guangzhou Petrochemical restarted its 8 million mt/year CDU on Dec. 21 following the completion of a scheduled maintenance which started late October, a company source said. With its resumption, the refiner lifted December throughput to 840,000 mt from 440,000 mt in November, the source said. Moreover, the S-zorb that caught fire Nov. 27 during maintenance was fixed and resumed operation, the source added.

** Sinopec"s Gaoqiao Petrochemical resumed oil products exports in December as the it returned from scheduled maintenance Dec. 12, a company source said Dec. 22. The plant plans to export 30,000 mt of gasoline and 30,000 mt of gasoil in December as it processes about 600,000 mt of crude in the month, the source said. Gaoqiao was shut on Oct. 8 for maintenance, and its throughput in November was zero when it skipped oil product exports.

** PetroChina"s Yunnan Petrochemical refinery in southwestern Yunnan province, has shut its 4 million mt/year residual hydrogenation unit and some of its relative downstream facilities due to a blast. The blast hit the residual hydrogenation unit Dec. 13 morning, according to a press release issued by the Anning city local government in Yuannan. A refining engineer said the closure of residual hydrogenation unit would cut about 30% of the refinery"s daily production.

** Sinopec"s Hainan Petrochemical refinery in southern China plans to completely shut for scheduled maintenance over March-April 2022, a source with the refinery said. This is a routine maintenance that is normally carried out by Chinese refineries every three to four years, according to the source. Sinopec Hainan refinery last carried out complete maintenance over November 2017-January 2018.

** Sinopec is looking to launch its 2 million mt/year crude distillation unit expansion at Luoyang Petrochemical in central China in January, with a new crude pipeline able to supply sufficient feedstock, a refinery source said late December. "We have reconfigured an existing crude pre-treater into a 2 million mt/year CDU to increase the primary capacity to 10 million mt/year. The start-up will be in the next month with the crude pipeline having been put into use in November," the refinery source said. The expansion was initially set to be put into use in H2 2020, but was delayed to H1 2021 due to construction of the 10 million mt/year Rizhao-Puyang-Luoyang crude pipeline and weak demand in oil product market, Platts reported. The source said the expansion needs more crude supplies discharged from Rizhao port in Shandong province and transmitted through the Rizhao-Puyang-Luoyang crude pipeline.

** PetroChina"s Guangxi Petrochemical in southern Guangxi province plans to start construction at its upgrading projects at the end of 2021, with the works set to take 36 months. The projects include upgrading the existing refining units as well as setting up new petrochemical facilities, which will turn the refinery into a refining and petrochemical complex. The project will focus on upgrading two existing units: the 2.2 million mt/year wax oil hydrocracker and the 2.4 million mt/year gasoil hydrogenation refining unit. For the petrochemicals part, around 11 main units will be constructed, which include a 1.2 million mt/year ethylene cracker.

** Sinopec"s Changling Petrochemical in central Hunan province plans to start construction for its newly approved 1 million mt/year reformer in 2021 and to bring its port upgrading project online by end-December.

** Axens said its Paramax technology has been selected by state-owned China National Offshore Oil Corp. for the petrochemical expansion at the plant. The project aims at increasing the high-purity aromatics production capacity to 3 million mt/year. The new aromatics complex will produce 1.5 million mt/year of paraxylene in a single train.

** China"s privately held refining complex, Shenghong Petrochemical, is likely to start feeding crudes into its newly built 16 million mt/year crude distillation unit, according to a company source in early January. The refinery initially planned to start up at the end of August, but this was postponed to the end of December due to slower-than-expected construction work, and then again to around the Lunar New Year. The construction of the complex started in December 2018. Located in the coastal city of Lianyungang in Jiangsu province, the company"s 16 million mt/year CDU is the country"s single biggest by capacity.

** Chinese privately owned refining and petrochemical complex Zhejiang Petroleum & Chemical has fully started up commercial operation at it 400,000 b/d Phase 2 refining and petrochemical project, parent company Rongsheng Petrochemical said in a document Jan. 12. There are two crude distillation units in the Phase 2 project, each with a capacity of 200,000 b/d. ZPC started trial run at one of the CDUs in November 2020. Due to tight feedstock supplies, the refiner could not feed the other CDU until the end of November 2021, when it gained crude import quota for the project. The nameplate capacity of the company doubled to 800,000 b/d in Phase 2. It will run four CDUs at about 82% of nameplate capacity in January. Rongsheng said Phase 2 adds 6.6 million mt/year aromatics and 1.4 million mt/year ethylene production capacity.

** Saudi Aramco continues to pursue and develop the integrated refining and petrochemical complex in China with Norinco Group and Panjin Sinchen. The joint venture plans to build an integrated refining and petrochemical complex in northeast China"s Liaoning province Panjin city with a 300,000 b/d refinery, 1.5 million mt/year ethylene cracker and a 1.3 million mt/year PX unit.

** Honeywell said China"s Shandong Yulong Petrochemical will use "advanced platforming and aromatics technologies" from Honeywell UOP at its integrated petrochemical complex. The complex will include a UOP naphtha Unionfining unit, CCR Platforming technology to convert naphtha into high-octane gasoline and aromatics, Isomar isomerization technology. When completed Yulong plans to produce 3 million mt/yr of mixed aromatics. Shandong"s independent greenfield refining complex, Yulong Petrochemical announced the start of construction work at Yulong Island in Yantai city at the end of October 2020.

Construction work is expected to be completed in 24 months. The complex has been set up with the aim of consolidating the outdated capacities in Shandong province. A total of 10 independent refineries, with a total capacity of 27.5 million mt/year, will be mothballed over the next three years. Jinshi Petrochemical, Yuhuang Petrochemical and Zhonghai Fine Chemical, Yuhuang Petrochemical and Zhonghai Fine Chemical will be dismantled, while Jinshi Asphalt has already finished dismantling.

** PetroChina officially started construction works at its greenfield 20 million mt/year Guangdong petrochemical refinery in the southern Guangdong province on Dec. 5, 2018.

** China"s coal chemical producer Xuyang Group has announced plans to build a greenfield 15 million mt/year refining and petrochemical complex in Tangshang in central Hebei province.

Rongsheng Petro Chemical Co, Ltd. specialises in the production and marketing of petrochemical and chemical fibres. Products include PTA yarns, fully drawn polyester yarns (FDY), pre-oriented polyester yarns (POY), polyester textured drawn yarns (DTY), polyester filaments and polyethylene terephthalate (PET) slivers.

Name Title Status Sex Age of Share of Share Variation for Share

Zheng); Zheng January 20, 2021 Report, the Rongsheng No

Share reform commitment N/A N/A N/A N/A N/A

re-financing during IPO 25% of the total shares held (including directly and indirectly) by them 2010 share lock-up is honored

Shareholders before issuance the same industry. Li Shuirong, the de facto controller and the largest Long term

shareholders of the Company during IPO 2010 honored

Controlling shareholder Share lock-up July 18, 2018 36 months

Securities Investment Fund, Hangzhou Jintou Shengnan Investment Share lock-up 6 months

There was no non-operating occupation of funds of the listed company by the controlling shareholder and other related parties during the reporting period.

Related related principles of to similar of related market price Date of

Petrochemi m-xylene, Market price Market price 552,015.23 34.27% 650,000 No bill, spot Market price 502&stockCode=002493&announcem

Kunsheng benzene, Market price Market price 789,132.73 11.53% 2,000,000 No acceptance Market price ure/detail?plate=szse&orgId=9900015

Rongsheng acceptance ure/detail?plate=szse&orgId=9900015

Holding Market price Market price 561,206.03 54.29% 1,000,000 No bill, spot Market price 502&stockCode=002493&announcem

I. Shares subject to sales restrictions 934,115,525 13.84% 237,436,637 -544,308,412 -306,871,775 627,243,750 6.19%

3. Shares held by other domestic 920,912,311 13.64% 237,436,637 -531,105,198 -293,668,561 627,243,750

Including: Shares held by 438,341,086 6.50% 28,355,387 -466,696,473 -438,341,086 0 0.00%

Shares held by domestic 482,571,225 7.14% 209,081,250 -64,408,725 144,672,525 627,243,750 6.19%

4. Shares held by foreign investors 13,203,214 0.20% 0 -13,203,214 -13,203,214 0 0.00%

Including: Shares held by 13,203,214 0.20% 0 -13,203,214 -13,203,214 0 0.00%

II. Shares without sales restrictions 5,816,234,475 86.16% 3,137,738,363 544,308,412 3,682,046,775 9,498,281,250 93.81%

1. RMB ordinary shares 5,816,234,475 86.16% 3,137,738,363 544,308,412 3,682,046,775 9,498,281,250 93.81%

III. Total shares 6,750,350,000 100.00% 3,375,175,000 0 3,375,175,000 10,125,525,000 100.00%

cash dividends of RMB 1.5 (including tax) for every 10 shares to all shareholders based on the existing total share capital of 6,750,350,000 shares, and increase 5

shares for every 10 shares to all shareholders with capital reserve. Before the equity distribution, the total share capital of the Company was 6,750,350,000 shares,

shareholders at the end of 87,354 previous month 84,083 0 0

Zhejiang Rongsheng Holding Group Co., Ltd. non-state-owned 61.46% 6,222,789,981 2,092,063,766 0 6,222,789,981

becoming the top 10 shareholders due to rights Fenhua Investment Partnership (Limited Partnership) and China Construction Bank Co., Ltd. - GF Technology Pioneer Hybrid Securities

issue (if any) Investment Fund became the top 10 shareholders due to their participation in the Company"s non-public offering of shares, and the agreed

Explanation of the relationship or concerted action and Li Guoqing are nephews of Li Shuirong, Chairman of the Board of Directors of Zhejiang Rongsheng Holding Group Co., Ltd., and Xu

among the above shareholders Yuejuan is sister-in-law of Li Shuirong, forming associated relationships. In addition to the above-associated relationships, the Company has

Zhejiang Rongsheng Holding Group Co., Ltd. 6,222,789,981 RMB ordinary shares 6,222,789,981

Li Shuirong 160,818,750 RMB ordinary shares 160,818,750

Hong Kong Securities Clearing Company Limited 137,861,004 RMB ordinary shares 137,861,004

Xu Yuejuan 96,525,000 RMB ordinary shares 96,525,000

China Construction Bank Co., Ltd. - GF Technology Pioneer Hybrid Securities Investment Fund 73,188,935 RMB ordinary shares 73,188,935

Hangzhou Fenhua Investment Partnership (Limited Partnership) 56,831,227 RMB ordinary shares 56,831,227

to Eligible Investors by 20 Rongsheng 14922 August 31, August 31, September interest. The

Rongsheng G2 0 2020 2020 2, 2024 interest shall be

Petrochemical Co., Ltd. paid once a year,

Share capital Tre asury risk Others Subtotal equity equity

Share capital Preferre d Pe rpe tu Capital reserve Tre asury Surplus reserve Others

Share capital Preferre d Pe rpe tual Capital reserve Tre asury comprehensive Surplus reserve Others

19 Rongsheng G1 1,000,000,000 2 years 994,614,150.95 1,002,893,069.59 48,854,246.58 2,452,683.83 1,054,200,000.00

20 Rongsheng G1 1,000,000,000 4 years (2 + 2) 995,452,830.20 1,029,248,500.45 47,700,000.04 1,211,525.65 47,747,169.81 1,030,412,856.33

20 Rongsheng G2 1,000,000,000 995,405,660.39 1,011,504,472.60 47,834,246.60 1,172,688.86 47,994,339.62 1,012,517,068.44

Petrochemical Base (phase income in the central budget for the construction of ecological

Petrochemical 29,402,156,939.81 -686,974,859.07 -685,867,384.15 609,487,159.99 25,364,168,603.77 598,708,284.15 598,708,284.15 1,717,207,655.03

Petrochemical Petrochemical Rural Commercial Petrochemical Petrochemical Rural Commercial

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.