Saudi Aramco in Talks with Chinese Hengli Group Co. for Acquisition Deal
In a move to expand its presence in key downstream markets, energy giant Saudi Aramco is in discussions with Chinese Hengli Group Co. to acquire a 10 percent stake in its subsidiary. The proposed deal is subject to due diligence and necessary regulatory clearances.
The memorandum of understanding signed between Aramco and Hengli Petrochemical Co. supports the former’s strategy to enhance its liquids-to-chemicals initiative and secure long-term crude oil supply agreements. This aligns with Aramco’s efforts to grow its global downstream footprint.
Strategic Investments in China’s Petrochemical Industry
Last year, Aramco sealed two significant agreements for liquids to chemicals investments in China. The first deal, signed in March 2023, involved China’s Norinco Group and Panjin Xincheng Industrial Group to establish a refinery and petrochemical complex in Liaoning province with a cost of around $12 billion.
The second agreement, inked in July, saw Aramco acquire a 10 percent stake in Rongsheng Petrochemical Co. for $3.4 billion, further solidifying its presence in the Chinese market.
Exploring New Partnerships in China
Mohammed Al-Qahtani, Aramco’s downstream president, expressed enthusiasm for the potential partnership with Hengli Petrochemical. He emphasized the company’s commitment to expanding its presence in the important Chinese market and advancing its liquids-to-chemicals strategy.
Hengli Petrochemical, a subsidiary of Hengli Group, operates a substantial refinery and chemicals complex in Liaoning province, showcasing its strong foothold in the industry.
Opportunities for Cooperation in Emission Reduction
At a development forum in Beijing, Amin Nasser, president and CEO of Aramco, highlighted the collaboration opportunities between Saudi Aramco and Chinese partners in emissions reduction sectors. He emphasized the potential for combining China’s strengths in renewables and critical materials with Saudi Arabia’s interest in solar, wind, hydrogen, and electrofuels.
Strengthening Strategic Ties between Saudi Arabia and China
Saudi Arabia and China are actively working to enhance their strategic ties, with the Kingdom’s minister of industry and mineral resources engaging in discussions with key Chinese officials in Beijing. The focus is on boosting economic collaboration, trade ties, and exploring investment opportunities in various sectors, including mining.