Saudi Aramco Announced Landmark Oil Refinery Deals in China

SEATTLE (Oil Monster): Saudi Arabian oil giant, Aramco, announced two multi-million oil refinery deals in China. The deals would see Aramco supplying the Chinese companies with a combined 690,000 barrels per day of crude oil.

Aramco reached an agreement to acquire 10% stake in privately controlled Rongsheng Petrochemical Co Ltd for about $3.6 billion. As part of the deal it will supply 480,000 bpd of crude oil to Rongsheng-controlled Zhejiang Petrochemical Corp (ZPC) for a period of 20 years. Earlier in 2018, the oil giant had reached a preliminary agreement with the Zhejiang provincial government for 9% stake in ZPC.

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Aramco's second major refining-petrochemical investment in China will be the Liaoning project, in the city of Panjin. The Panjin complex will be built and operated by joint venture Huajin Aramco Petrochemical Company (HAPCO). The complex comprises of a 300,000 barrels per day (bpd) oil refinery and a cracker.

The construction works at the Panjin complex will commence in Q2 this year, after necessary administrative approvals. The plant is expected to be fully operational by 2026. Aramco will supply up to 210,000 bpd of crude oil as feedstock.

The deals will intensify the growing competition between Saudi Arabia and Russia on crude oil supplies to China.

Aramco’s deepening ties with Beijing have raised security concerns in Washington, reports suggest.