Aramco invested USD 3.4 bln for strategic stake in Rongsheng Petrochemical, deal expects to expand both parties' downstream global presence.

Jul 23, 2023 (China Knowledge) - The world's largest integrated energy and chemicals giant Saudi Aramco (2222.SR) had won approval and paid to acquire a strategic stake in Rongsheng Petrochemical (002493), a privately-run petrochemical giant that owns world's largest single-site integrated refining and petrochemical facility.

The 10% stake by Aramco marks a significant step forward in this collaboration, as per the comprehensive strategic cooperation agreement signed between the two entities on March 27th this year. Under the terms of the agreement, Aramco's wholly-owned subsidiary, Aramco Overseas Company, shall acquire this 10% stake in Rongsheng Petrochemical for RMB 24.6 billion (approximately USD 3.4 billion at the current exchange rate). This transaction holds immense significance for both parties.

Mr. Li Shuirong, Chairman of Rongsheng Petrochemical, remarked, "the successful completion of this transaction signifies a new era of collaboration between Rongsheng and Aramco, and marks a crucial milestone in Rongsheng's internationalization strategy."

Mohammed Y. Al Qahtani, Aramco Downstream President, said: "the company's strategic partnership with Rongsheng advances Aramco's liquids to chemicals strategy while growing its presence in China and showcases the importance as a reliable supplier of crude oil. This key acquisition is an important part of Aramco's long-term growth strategy, expanding its presence in a vital market."

In future Rongsheng Petrochemical and Saudi Aramco will complement each other in their respective industries, providing a solid foundation for further collaboration. The two companies will engage in comprehensive cooperations, focusing on the following key areas:

- Advanced technology sharing: Leveraging their strengths, both parties will collaborate on the development of new technologies, processes, and equipment to meet future market demands.

Additionally, they will share necessary research and development resources.

- Stable crude oil supply assurance: Aramco will commit to supply Rongsheng Petrochemical with no less than 480,000 barrels per day of high-quality crude oil, as well as providing production materials such as naphtha, mixed xylene, and straight-run fuel oil.

- Interest-free procurement credit line: A credit line of...