Saudi Aramco said it is in talks to acquire a 10 percent stake in Chinese petrochemical company Hengli, in a deal that would boost the Saudi oil giant's presence in China.
Aramco said in a statement that it has entered into discussions with Hengli Group Limited regarding the potential acquisition of a 10 percent stake in Hengli Petrochemical, subject to the necessary evaluations and approvals.
The two companies today signed a memorandum of understanding regarding the proposed transaction, which is consistent with Saudi Aramco’s strategy to expand its refining, chemicals and marketing presence in key high-value markets, enhance its liquids-to-chemicals program, and secure long-term crude oil supply agreements.
If the deal is completed, it would be the latest in a series of Aramco deals with Chinese refiners.
China's privately owned Rongsheng Petrochemical and Aramco announced in January that they were in talks to swap 50 percent stakes in their refineries in China and Saudi Arabia.
In July, Aramco completed a $3.4 billion deal to acquire a 10 percent stake in Rongsheng, linked to a 20-year crude oil supply agreement to Rongsheng subsidiary Zhejiang Petrochemical.
Aramco is also in talks to buy a 10 percent stake in China's Shandong Yulong Petrochemical Co., and last year announced plans to become a strategic investor in another private Chinese refiner, Jiangsu Xinghong.
Aramco subsidiary SABIC also announced in January that it was moving forward with building a petrochemical complex in southeastern China's Fujian province at an estimated cost of $6.4 billion, as part of a joint venture with state-owned Fujian Fuhua Guoli Petrochemical.
Hengli Petrochemical owns and operates a 400,000 barrel-per-day refinery and integrated chemicals complex in Liaoning Province, as well as a number of facilities in Jiangsu and Guangdong Provinces.
