Dahran, September 27, 2023, Aramco and Jiangsu Eastern Shenghong Co., Ltd. have formalized their intent to explore a strategic collaboration through the signing of a cooperation framework agreement. This agreement paves the way for Aramco to potentially acquire a 10% strategic equity stake in Jiangsu Shenghong Petrochemical Industry Group Co., Ltd., a wholly-owned subsidiary of Eastern Shenghong. This potential acquisition is contingent upon the completion of due diligence processes and obtaining necessary regulatory approvals.
Shenghong Petrochemical, a subsidiary of Eastern Shenghong, is the proprietor and operator of an integrated refinery and petrochemicals complex with a capacity of 320 MBD. Additionally, it manages a methanol-to-olefins and derivatives complex, along with a purified terephthalic acid production facility, all of which are situated in the Xuwei Petrochemical Industrial Park within Jiangsu Province.
As part of the collaboration framework, Aramco envisions supplying crude oil and potentially other feedstocks to Shenghong Petrochemical. Furthermore, both Aramco and Shenghong Petrochemical are exploring the prospect of jointly developing a substantial expansion project. The finalization of this project will be subject to further discussions between the two entities and the subsequent execution of definitive agreements.
Commenting on this development, Mohammed Y. Al Qahtani, Aramco Downstream President, expressed Aramco's eagerness to partner with Eastern Shenghong in ensuring a reliable energy supply to support China's long-term growth, development, and energy security. He emphasized the significance of this cooperation framework agreement within Aramco's Downstream strategy, emphasizing their commitment to expanding into the vital Chinese market. Aramco views China as a pivotal partner, not just in the present but for the foreseeable future.
Eastern Shenghong, listed on the Shenzhen Stock Exchange, stands as a prominent vertically-integrated energy and chemicals enterprise renowned for its advanced technologies in the fields of new energy and materials. This collaboration marks a noteworthy step forward in forging closer ties between these two industry leaders.
