Rongsheng Petrochemical, which has just introduced Saudi Aramco, has also joined forces with Sinopec.
Rongsheng Petrochemical, which owns the world’s largest monomer refinery, has a package of cooperation with Saudi Aramco that involves the supply of crude oil, the main raw material; and this cooperation with Sinopec ensures stable sales of refined oil.
Amount involved: 55 billion yuan
On March 30, the official website of Rongsheng Petrochemical showed that on March 28, Zhejiang Petrochemical Co., Ltd. (hereinafter referred to as “Zhejiang Petrochemical”) and Sinopec Sales Co., Ltd. signed a strategic cooperation framework agreement in Beijing.
Xiang Jiongjiong, general manager of Rongsheng Petrochemical, and Chen Chengmin, chairman and party secretary of Sinopec Sales Co., Ltd., attended the signing ceremony and held discussions.
According to the framework agreement, the two parties will carry out comprehensive cooperation in the field of refined oil products. The annual framework agreement amount exceeds 55 billion yuan, and the annual agreement volume reaches more than 60% of Zhejiang Petrochemical’s domestic market volume. At the same time, the two parties had in-depth exchanges on the future development direction of the domestic refined oil market, the pricing mechanism of the refined oil trading industry, and the domestic refined oil bulk trade benchmark price index.
Rongsheng Petrochemical pointed out that with the continuous increase of new domestic production capacity, the contradiction between supply and demand of refined oil products has become increasingly prominent. In addition, the country has stepped up regulation of the refined oil industry, and the refined oil market is facing major changes. The strategic cooperation between Zhejiang Petrochemical, a holding subsidiary of Rongsheng Petrochemical, as the largest single refinery in China, and Sinopec, which has the largest domestic demand for refined oil, will help create a “strong alliance, win-win cooperation, complementary advantages, A cooperative situation of mutual benefit.
This strategic cooperation between the two parties will help improve the brand image of Zhejiang Petrochemical, expand the sales channels of refined oil products, fully release the 40 million tons/year crude oil processing capacity, and further enhance the industry visibility and product competitiveness of Zhejiang Petrochemical at home and abroad.
Just locked in Saudi Aramco crude oil supply
Before joining hands with Sinopec, Rongsheng Petrochemical had just introduced Saudi Aramco as a strategic investor and signed a package agreement.
That is, on March 27, Rongsheng Petrochemical and other parties signed the “Crude Oil Purchase Agreement”, “Relief Deed”, “Parent Company Guarantee”, “ATS Framework Agreement”, etc. (hereinafter referred to as the “Crude Oil Purchase Agreement”, etc.) “Package Agreement”), the two parties will cooperate in aspects such as crude oil procurement, raw material supply, chemical sales, refined chemical product sales, crude oil storage and technology sharing.
Among them, the “Crude Oil Purchase Agreement” stipulates that Zhejiang Petrochemical Co., Ltd. or the buyer’s agent Rongsheng Petrochemical (Singapore) Pte. Ltd. will purchase crude oil from Saudi Aramco, with a total purchase quantity of 480,000 barrels per day of various grades of crude oil. Purchase prices are determined based on public crude oil market indicators.
Rongsheng Petrochemical is a leading domestic private petrochemical company. The main raw material is crude oil. In order to meet product production needs, the company needs to import a large amount of crude oil and other raw materials from international crude oil suppliers including Saudi Aramco every year.
Data show that in 2022, Rongsheng Petrochemical purchased approximately 60.3 billion yuan of crude oil and other raw materials from Saudi Aramco and its related parties, accounting for 21% of the company’s similar transactions. From January to February 2023, Rongsheng Petrochemical purchased approximately 9 billion yuan of crude oil and other raw materials from Saudi Aramco and its related parties.
Rongsheng Petrochemical stated that through this strategic cooperation, the company and its subsidiaries will further consolidate the existing crude oil procurement business relationship with Saudi Aramco, obtain long-term and stable supply of crude oil and other chemical raw materials, and are expected to further expand the company’s chemical products. Overseas sales channels ensure the stability of the petrochemical industry chain; at the same time, Saudi Aramco will also receive a large and stable demand for crude oil procurement and further expand its layout in China’s chemical industry. In addition, the signing of the strategic cooperation agreement and the technology sharing framework agreement under the agreement have laid a good foundation for the company to introduce Saudi Aramco’s advanced technologies in refining, petrochemical and other fields, and for the two parties to complement each other’s technological advantages and share resources.
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