China refiner Shenghong in preliminary deal with Saudi…

China refiner Shenghong in preliminary deal with Saudi Aramco for equity investment

SINGAPORE, Sept 27 (Reuters) – China’s privately controlled Jiangsu Eastern Shenghong Co Ltd said on Wednesday it had entered a preliminary deal with Saudi Aramco for the Middle Eastern oil major to become a minority stake holder in its refining and petrochemical unit.

Under a framework agreement, Saudi Aramco intends to become a strategic investor in Jiangsu Shenghong Petrochemical, which operates a refinery and petrochemical complex in the eastern province of Jiangsu.

The companies are willing to cooperate in areas such as long-term crude supply and marketing of refined fuel and chemical products, as well as licensing high-value added manufacturing technology, according to a stock filing. The parties will carry out due diligence and evaluation works to follow up on this agreement, the company added. Shenghong Petrochemical, one of China’s newest refineries, operates a 320,000 barrel-per-day plant in port city of Lianyungang. Under a similar alliance, Aramco said in March it had agreed to acquire a 10% stake in privately controlled Rongsheng Petrochemical Co Ltd for about $3.6 billion, an investment attached to a 20-year crude oil supply deal with Rongsheng-controlled Zhejiang Petrochemical Corp.

(Reporting by Chen Aizhu; Editing by Kirsten Donovan)

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