Aramco and Eastern Shenghong sign cooperation framework agreement
29 September 2023
Aramco, a prominent integrated energy and chemicals company, has entered into a cooperation framework agreement with Jiangsu Eastern Shenghong Co., Ltd. ("Eastern Shenghong") to explore the potential acquisition of a 10% strategic equity stake in Jiangsu Shenghong Petrochemical Industry Group Co., Ltd. ("Shenghong Petrochemical"), a wholly-owned subsidiary of Eastern Shenghong. This acquisition is contingent on completing due diligence and obtaining necessary regulatory approvals.
Shenghong Petrochemical operates a 320 thousand barrels per day (MBD) integrated refinery and petrochemicals complex, a methanol-to-olefins and derivatives complex, and a purified terephthalic acid production facility through its wholly-owned subsidiaries. These facilities are situated in the Xuwei Petrochemical Industrial Park in Jiangsu Province.
As part of the Cooperation Framework Agreement, Aramco intends to supply Shenghong Petrochemical with crude oil and potentially other feedstocks. Additionally, Aramco and Shenghong Petrochemical plan to collaborate on a substantial expansion project, pending further discussions and the execution of definitive agreements.
Mohammed Y. Al Qahtani, Aramco Downstream President, emphasized the importance of this partnership, stating, "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, a publicly listed company on the Shenzhen Stock Exchange, is a leading vertically-integrated enterprise in the energy and chemicals sector. It employs advanced technologies in its new energy and materials businesses.