Aramco and Eastern Shenghong sign cooperation framework agreement
Aramco and Jiangsu Eastern Shenghong Co., Ltd. (“Eastern Shenghong”) today signed a cooperation framework agreement to facilitate discussions relating to the possible acquisition by Aramco of a 10% strategic equity interest in Jiangsu Shenghong Petrochemical Industry Group Co., Ltd. (“Shenghong Petrochemical”), a wholly-owned subsidiary of Eastern Shenghong, subject to due diligence and required regulatory clearances.
Shenghong Petrochemical owns and operates a 320 MBD integrated refinery and petrochemicals complex, a methanol-to-olefins and derivatives complex as well as a purified terephthalic acid production facility through its wholly-owned subsidiaries. The facilities are co-located in the Xuwei Petrochemical Industrial Park in Jiangsu Province.
Under the Cooperation Framework Agreement, it is intended that Aramco would supply Shenghong Petrochemical with crude oil and potentially other feedstocks. Aramco and Shenghong Petrochemical also intend to cooperate on the development of a large expansion project, subject to further discussions between the parties and the execution of definitive agreements.
Mohammed Y. Al Qahtani, Aramco Downstream President, said: “Aramco looks forward to partnering with Eastern Shenghong to supply the reliable energy required for China’s long-term growth, development and energy security. The signing of this cooperation framework agreement is another significant milestone in Aramco’s Downstream strategy to increase conversion of Arabian crude oil to chemicals and to expand into the critically important Chinese market. We see China as an important partner not only for today but for decades to come.”
Eastern Shenghong, which is listed on the Shenzhen Stock Exchange, is a leading, vertically-integrated energy and chemicals enterprise which deploys advanced technologies in its new energy and materials businesses.