SAUDI oil giant Aramco said on Monday (Apr 22) it is in talks to acquire a 10 per cent stake in China’s Hengli Petrochemical, a deal which would further bolster Aramco’s growing downstream presence in China.

Aramco is in talks with parent Hengli Group and signed a memorandum of understanding over the proposed transaction, which is subject to due diligence and regulatory approvals, Aramco said in a statement.

The potential deal “aligns with Aramco’s strategy to expand its downstream presence in key high-value markets, advance its liquids-to-chemicals program, and secure long-term crude oil supply agreements,” it said.

An agreement would be the latest in a string of Aramco deals with Chinese refiners.

In January, Chinese privately-controlled refiner Rongsheng Petrochemical, and Aramco announced they were in talks to take a 50 per cent stake in each other’s refineries in China and Saudi Arabia.

Aramco in July closed a deal valued at US$3.4 billion to buy a 10 per cent stake in Rongsheng, attached to a 20-year crude oil supply deal with Rongsheng-controlled Zhejiang Petrochemical.

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Aramco has also been in talks to buy a 10 per cent stake in Shandong Yulong Petrochemical and last year announced plans to become a strategic investor in another private Chinese refiner Jiangsu Shenghong Petrochemical.

Aramco subsidiary SABIC said in January it will go ahead with building a petrochemical complex in southeastern China’s Fujian province, expected to cost around US$6.4 billion, in a joint venture with state-owned Fujian Fuhua Gulei Petrochemical.

Hengli Petrochemical owns and operates a 400,000 barrels a day refinery and integrated chemicals complex in China’s Liaoning Province, as well as several facilities in the provinces of Jiangsu and Guangdong. REUTERS