MOSCOW (MRC) -- China's privately controlled Jiangsu Eastern Shenghong Co Ltd said on Wednesday it had entered a preliminary deal with Saudi Aramco for the Middle Eastern oil major to become a minority stakeholder in its refining and petrochemical unit, said Reuters.
Under a framework agreement, Saudi Aramco intends to become a strategic investor in Jiangsu Shenghong Petrochemical, which operates a refinery and petrochemical complex in the eastern province of Jiangsu.
In a separate statement, Aramco said it was looking at investing 10% in Shenghong Petrochemical, adding that companies also intend to cooperate on a large expansion project, although Aramco did not provide details.
The companies are willing to cooperate in areas such as long-term crude supply and marketing of refined fuel and chemical products, as well as licensing high-value added manufacturing technology, according to a stock filing. The parties will carry out due diligence and evaluation works to follow up on this agreement, the company added. Shenghong Petrochemical, one of China's newest refineries, operates a 320,000 barrel-per-day plant in port city of Lianyungang. Under a similar alliance, Aramco said in March it had agreed to acquire a 10% stake in privately controlled Rongsheng Petrochemical Co Ltd for about $3.6 billion, an investment attached to a 20-year crude oil supply deal with Rongsheng-controlled Zhejiang Petrochemical Corp.
We remind, Aramco, one of the world’s leading integrated energy and chemicals companies, has agreed to purchase a 100% equity stake in Esmax Distribuscion SpA (“Esmax”) from Southern Cross Group, a Latin America-focused private equity company. The transaction is subject to certain customary conditions, including regulatory approvals.