Saudi Aramco started talks to buy a 10% stake in China’s Hengli Petrochemical Ltd. as it looks to secure a long-term market for its oil.
State-owned Aramco and the Chinese company signed an initial agreement to explore a potential transaction, according to a statement from the Saudi company. No financial details or a timeline were provided. The 10% stake in Hengli, based in the Chinese port city of Dalian, has a market value of $1.5 billion based on its current share price.
The 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.