China: Downstream Investment Saudi Aramco Signs MOU with China’s Zhejiang Free Trade Zone
Under the terms of the agreement, Saudi Aramco will expand its downstream investment in the Zhejiang Free Trade Zone. The MOU also includes a long-term crude oil supply agreement and the ability to utilise Zhejiang Petrochemical’s large crude oil storage facility to serve its customers in Asia.
Dhahran/Saudi Arabia – Saudi Aramco has recently signed a Memorandum of Understanding (MOU) with China’s Zhejiang Free Trade Zone, in which the Zhoushan Government emphasized its support for incentivising Saudi Aramco’s greater investment in Zhejiang’s future downstream growth. The MOU was signed in conjunction with a visit to Saudi Aramco’s headquarters in Dhahran by Yuan Jiajun, Governor of the Chinese province of Zhejiang.
Together with prior agreements signed during HRH Crown Prince Mohammed Bin Salman’s visit to China in February this year, this MOU facilitates Saudi Aramco’s planned acquisition of a 9 % stake in the Zhejiang integrated refinery and petrochemical complex. It will also include a long-term crude oil supply agreement and the ability to utilise Zhejiang Petrochemical’s large crude oil storage facility to serve its customers in Asia. These activities reflect the Company’s strategy to expand its presence in the Chinese energy sector.
The agreement solidifies Saudi Aramco’s participation in the 400,000 barrels per day refinery from Phase III of the Zhoushan Petrochemical Greenfield project, and also allows the parties to evaluate potential opportunities for investment in other parts of the value chain. These may include refining and petrochemical production, storage and trade of crude oil & natural gas, retail, as well as distribution of oil products within the Zhejiang Free Trade Zone.