Saudi Arabia’s state-owned petroleum and natural gas company Aramco is in talks to acquire a 10% stake in Hengli Petrochemical, subject to due diligence and regulatory approvals.
The two companies have signed a Memorandum of Understanding (MoU) regarding the proposed transaction.
Aramco said that the MoU aligns with its plans to expand its downstream presence, advance its liquids-to-chemicals program, and secure long-term crude oil supply agreements.
Hengli Petrochemical, a controlled subsidiary of Hengli Group, owns and operates a 400,000 barrel per day (bpd) refinery and integrated chemicals complex in Liaoning Province, China.
The company also operates several plants and production facilities in Jiangsu and Guangdong Provinces.
Aramco downstream president Mohammed Al Qahtani said: “This MoU supports our efforts to grow our global downstream footprint. We continue to explore new opportunities in important markets, as we seek to progress in our liquids-to-chemicals strategy.
“We look forward to forging new partnerships and are excited by the prospect of expanding our presence in the important Chinese market.”
Earlier this year, Aramco signed 40 corporate procurement agreements worth $6bn with suppliers in Saudi Arabia in a move to advance its strategic localisation programme.
The new corporate procurement agreements are expected to contribute towards the company’s resilience, reliability and ability to meet the changing requirements of its customers.
Through the deals, the company intends to its domestic supply chain ecosystem.
They will cover the supply of a range of products, including strategic commodities, instrumentation, electrical and drilling equipment.
Furthermore, the deals will also provide suppliers with long-term visibility of demand, allowing them to capture future growth as well as advance localisation initiatives.
