Saudi Arabia state-run oil and gas company Saudi Aramco has signed an agreement to acquire a 9% stake in the Zhejiang Zhoushan greenfield refinery and petrochemical complex project in the city of Zhoushan, in Zhejiang (China) for an undisclosed price. The refinery is currently being built and will have a processing capacity of 800,000 bbl/d. The first phase expected to be commissioned in the second half of 2019 will include a 400,000 bbl/d refinery, a 1.4 Mt/year ethylene cracker unit, and a 5.2 Mt/year aromatics unit. A second 400,000 bbl/d phase will be commissioned later.
Saudi Aramco's involvement also entails a long-term crude supply agreement and the ability to ue the project's storage facilities to serve its customers in Asia. Besides, the company also agreed to set up a large scale retail network over the course of the next five years in the Zhejiang region with its local partner Zhejiang Energy.
Earlier in February 2019, Saudi Aramco agreed to form a joint venture (JV) with the Chinese company Norinco (China North Industries Corporation) and Panjin Sincen to jointly develop another refining and petrochemical complex in the city of Panjin, in Liaoning (northern China). Saudi Aramco will own 35% of the newly formed Huajin Aramco Petrochemical company, with Norinco and Panjin Sincen holding 36% and 29%, respectively. The JV will operate a 300,000 bbl/d refinery, which is expected to start commercial operations in 2024. Saudi Aramco will supply 70% of the crude feedstock for the refining complex.
Saudi Aramco is advancing quickly with its expansion projects in Asia. The company aims at focusing on the development of international operations and not only pushes into overseas exploration and production, i.e. upstream activities, but will also build up a portfolio across the value chain and expand its activities in the midstream and downstream sectors.