Saudi Aramco announced intentions to buy a 10% stake in a Chinese petrochemicals company on Monday. The Gulf energy giant cited the transaction as proof of its “long-term commitment to China.”
The deal with Rongsheng Petrochemical comes as Saudi Arabia, the top exporter of crude in the world, strengthens its political ties with China, the top importer, including a recent reconciliation with Iran that was mediated by Beijing.
According to a statement from Aramco, the arrangement calls for Rongsheng to receive 480,000 barrels of Arabian crude per day “under a long-term sales agreement.”
“This announcement demonstrates Aramco’s long-term commitment to China and belief in the fundamentals of the Chinese petrochemicals sector,” said Aramco vice president Mohammed Al Qahtani.
“It is an important acquisition for Aramco in a key market, supporting our growth ambitions and advancing our liquids to chemicals strategy. It also promises to secure a reliable supply of essential crude to one of China’s most important refiners.”
News of the Rongsheng deal came one day after Aramco announced it would partner with two other Chinese companies to build a refinery and petrochemical plant in the northeastern Chinese city of Panjin.
That facility “is expected to be fully operational by 2026”, Aramco said in a statement.
Speaking on Sunday at the China Development Forum in Beijing, Aramco CEO Amin Nasser said the firm, a leading source of income for the kingdom, was “doubling down on China’s energy supply”.
