Aramco may back third Chinese firm

Saudi Aramco is interested in acquiring a minority stake in yet another Chinese petrochemical company. The energy giant, controlled by the Saudi government, has signed a memorandum of understanding to enter discussions to buy a 10% equity interest in Shandong Yulong Petrochemical, which is building a refinery and petrochemical complex in Yantai City, China. The complex will have the capacity to process about 400,000 barrels of crude oil per day. As part of an agreement, Aramco could supply the firm with oil and other feedstocks for refining and chemical production. Linking with Chinese chemical makers is part of Aramco’s strategy of directing its oil output toward chemical production rather than being overly reliant on ebbing fuel markets. In September, it entered similar discussions to take a 10% stake in Jiangsu Shenghong Petrochemical; it had bought 10% of the major Chinese firm Rongsheng Petrochemical in July. Both of those deals are tied to Aramco crude oil supply agreements.