Page 4 - DMEA Week 36

DMEA CommentAry DMEA
Aramco continues Asian
downstream expansion
as IPO approaches
Aramco has expanded its downstream investment in China as it seeks to further increase its global mid- and downstream footprint to maximise value ahead of the IPO
middle eAst
WhAt:
A deal was announced this week to expand ties with China’s Zhoushan Province, centring on re ning and petrochemicals.
Why:
Aramco has been securing markets for its crude around the world while creating an impressive downstream portfolio.
WhAt next:
The IPO looks set to be split into a local listing followed by a larger overseas sale and
there may yet be more downstream investment announcements between now and then.
SAUdI Aramco cannot be kept out of the news at the moment. With eyes having focused on the changes at the top of the kingdom’s oil hierarchy and the market waiting with baited breath for news about the state rm’s public o ering, Ara- mco has expanded yet further downstream.
On September 5, the signing of a memoran- dum of understanding (MoU) with China’s Zhe- jiang Free Trade Zone was announced.
In making the announcement, the Zhoushan Government was keen to emphasise that it would support and incentivise Aramco’s greater investment in Zhejiang’s “future downstream growth”. e MoU was signed during a visit to dhahran by Zhejiang Governor Yuan Jiajun.
Building bonds
Ties between the Saudi rm and the Chinese province have grown rapidly this year.
In February, three MoUs were signed expand- ing Aramco’s presence in the eastern Zhejiang province.
One entails acquiring a 9% stake from the Zhousan government in the estimated $25bn Zhejiang Integrated Re ning & Petrochemical Complex, under development by Zhejiang Pet- rochemicals Co. (ZPC).
The second was signed with ZPC’s local
shareholders – Rongsheng Petrochemical, Juhua Group and Tongkun Group – setting the terms for their collaboration. is includes a long-term crude supply agreement with the Saudi rm and permission to use ZPC’s crude storage facility to service Aramco’s Asian clients.
e giant project is being developed in two phases. The first comprises a 400,000 barrel per day (bpd) re nery, a 1.4mn tonne per year ethane cracker and a 5.2mn tpy aromatics unit, while the second will double re ning capacity and deepen chemical integration. Completion of the rst phase is due in 2021.
A third MoU, with state-owned Zhejiang Energy, calls for the joint development of a retail network in the province over the next ve years for the sale partly of output from the ZPC complex.
Asian persuasion
Aramco aims to raise global re ning capacity to 8-10mn bpd by 2030, with expansion focused on major Asian consumers of the kingdom’s crude. downstream investment projects in China, India, Indonesia, Malaysia and Pakistan are at various stages of execution, while investments in South Korea have long been established.
Most of Aramco’s current 4.9mn bpd capacity
P4
w w w . N E W S B A S E . c o m Week 36 12•September•2019