Aramco to Invest Billions in China's Petrochemicals Industry as it Posts Record Profit

beijingwalker · Apr 11, 2023

Aramco to Invest Billions in China's Petrochemicals Industry as it Posts Record Profit

4/11/2023 8:03:45 AM

(MENAFN) Saudi Arabia's state-owned oil giant Aramco announced on Sunday and Monday that it will be investing billions of dollars in China's downstream petrochemicals industry, including the construction of a new refinery.

This comes as the company posted a record profit of more than $160 billion in 2022, signaling its increasing economic power. The investment will include the acquisition of a 10% stake in China's Rongsheng Petrochemical Co. Ltd, valued at $3.6 billion, and a long-term sales agreement to supply 480,000 barrels per day to Rongsheng affiliate Zhejiang Pettroleum and Chemical Co. Ltd. Aramco will also construct a new refinery and petrochemical complex in northeastern China through a joint venture, with plans to supply 210,000 barrels per day of crude to the complex.

These investments demonstrate Aramco's long-term commitment to China and the company's belief in the fundamentals of the Chinese petrochemicals sector, according to Aramco executive vice president Mohammed Al Qahtani. Moreover, the investments aim to secure a reliable supply of essential crude to one of China's most important refiners.

Saudi Arabia has been cultivating closer ties with both Russia and China in recent years. The kingdom has developed closer ties with Beijing, despite being a longtime U.S. ally. Aramco's investments in China's petrochemicals industry are part of this strategic partnership. This move also comes as Saudi Arabia and Iran agreed to restore diplomatic ties for the first time since 2016 in a deal brokered by Beijing, highlighting the kingdom's growing ties with China.