MOSCOW (MRC) -- Saudi Aramco signed a Memorandum of Understanding (MoU) with China’s Zhejiang Free Trade Zone, in which the Zhoushan Government emphasized its support for incentivizing Saudi Aramco’s greater investment in Zhejiang’s future downstream growth, reported Reuters.
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 utilize 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 and natural gas, retail, as well as distribution of oil products within the Zhejiang Free Trade Zone.
As MRC informed earlier, Motiva Enterprises LLC, a unit of global energy giant Saudi Aramco, is acquiring a materials production site from Flint Hills Resources Port Arthur LLC for an undisclosed price. The site in Port Arthur, Texas, includes production of plastics feedstocks ethylene, propylene and cyclohexane. Officials said in an 19 Aug news release that the acquisition is set to close in the fourth quarter of 2019. Flint Hills retains its other operations.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.
Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
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