In a significant move within the energy and chemicals industry, Saudi Arabian Oil Company (Aramco), a global leader in integrated energy solutions, has joined hands with Jiangsu Eastern Shenghong (Eastern Shenghong) to explore the acquisition of a 10 percent strategic equity interest in Jiangsu Shenghong Petrochemical Industry Group (Shenghong Petrochemical). This agreement marks a crucial step towards fostering deeper collaboration, pending due diligence and regulatory approvals.
Shenghong Petrochemical, a subsidiary of Eastern Shenghong, operates a sprawling 320 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 located within the Xuwei Petrochemical Industrial Park in Jiangsu Province, China.
The Cooperation Framework Agreement envisions Aramco supplying Shenghong Petrochemical with crude oil and other potential feedstocks. Moreover, both companies have expressed interest in collaborating on a substantial expansion project, the details of which are to be finalized through further discussions and definitive agreements.
Mohammed Y. Al Qahtani, Aramco Downstream President, emphasized this agreement as a significant milestone in Aramco’s Downstream strategy, aiming to enhance the conversion of Arabian crude oil into chemicals and broaden their presence in the critical Chinese market.
Eastern Shenghong, a Shenzhen Stock Exchange-listed company, stands as a leading vertically-integrated energy and chemicals enterprise, incorporating advanced technologies within its new energy and materials businesses. This collaboration signifies a promising avenue for both companies to leverage their respective strengths for mutual growth and advancement within the industry.