On September 27, Saudi Aramco and Dongfang Shenghong issued separate announcements stating that the two parties had signed a cooperation framework agreement.
Saudi Aramco said in the announcement that Saudi Aramco, the world’s leading integrated energy and chemical enterprise, and Jiangsu Oriental Shenghong Co., Ltd. (“Oriental Shenghong”) signed a cooperation framework agreement today to promote the possible acquisition of a wholly-owned subsidiary of Oriental Shenghong by Saudi Aramco. Related discussions on a 10% strategic stake in Jiangsu Shenghong Petrochemical Group Co., Ltd. (hereinafter referred to as “Shenghong Petrochemical”). The transaction is subject to due diligence and necessary regulatory approvals.
Under the agreement, Saudi Aramco will supply crude oil and other potential raw materials to Shenghong Petrochemical. Saudi Aramco and Shenghong Petrochemical will also collaborate on large-scale expansion projects.
The main contents of the agreement include:
●Saudi Aramco or its related parties intend to become a strategic investor in Jiangsu Shenghong Petrochemical Industry Group Co., Ltd., a wholly-owned subsidiary of the company, and plan to hold a minority stake in the above company;
●Both parties intend to cooperate in the long-term procurement and supply of raw materials such as crude oil, sales of chemical products and fuel products, and licensing of high value-added technologies.
Dongfang Shenghong has already made in-depth deployment of new energy and new materials. It is a representative of domestic energy and chemical enterprises in the entire industrial chain. It currently has 16 million tons/year of integrated refining and chemical equipment, 240
A 10,000-ton/year methanol-to-olefins (MTO) unit and a 700,000-ton/year propane dehydrogenation (PDH) unit.
Saudi Aramco is one of the world’s largest oil production companies with many years of history. It is mainly engaged in oil exploration, development, production, refining, transportation and sales. Its business covers the Kingdom of Saudi Arabia and the world. It is also an important crude oil for Oriental Shenghong. One of the raw material suppliers.
It is reported that this cooperation framework agreement does not involve a specific amount, but is only a preliminary intention reached by both parties after negotiation. If the two parties finally sign a formal cooperation agreement and implement it smoothly, it is expected to have a positive impact on Dongfang Shenghong’s business development in the long term.
Since this year, Saudi Aramco has made frequent moves in the Chinese market.
On March 26, Saudi Aramco teamed up with Norinco and Panjin Xincheng Industrial Group to build a large-scale integrated refining and chemical complex in Panjin, Liaoning, Northeast China, with a total investment of US$12.2 billion.
On March 26, the Guangdong Provincial People’s Government and the Saudi National Oil Company (Saudi Aramco) signed a memorandum of cooperation. The memorandum proposes a cooperation framework to explore investment opportunities in multiple fields, including energy cooperation, research and innovation, industrial projects, financial cooperation, talent exchange, etc.
On March 27, Saudi Aramco and Rongsheng Petrochemical signed a final agreement. Saudi Aramco
It plans to acquire 10% of the equity of Rongsheng Petrochemical, a company listed on the Shenzhen Stock Exchange in China, for RMB 24.6 billion (equivalent to approximately US$3.6 billion).
From September 10th to 11th, Wang Weizhong, Governor of Guangdong Province, led a Guangdong Provincial delegation to visit Saudi Arabia, meet with Saudi dignitaries, attend the China (Guangdong)-Saudi Arabia Economic and Trade Cooperation and Exchange Conference, inspect and investigate energy companies and scientific research institutions, and further strengthen the cooperation in various fields. Cooperation and in-depth exchanges, and efforts to achieve mutual benefit and win-win results. It is reported that a total of 20 cooperation projects were reached at the meeting, with a total amount of 21.1 billion yuan.
After the release of the second quarter annual report, Saudi Aramco President and CEO Amin H.
Nasser talked about investment and cooperation in China, saying that the company has multiple investment plans in China and many investments in China’s chemical industry are in preparation. The above investments will be announced in due course.
China is the world’s largest oil importer, while Saudi Arabia is one of the countries with the richest reserves in the world and is also a major member of OPEC. Looking around the world, China and Saudi Arabia have consistent development strategies, similar development concepts, and development advantages in energy, petrochemicals, etc. They are complementary and are natural partners. The two parties will definitely have more cooperation in the future.
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