Saudi Aramco is looking to invest in more chemical plants in China this year and next, adding to deals it’s already clinched in the country to secure long-term buyers for its crude.The world’s largest crude exporting company is targeting additional facilities that can turn oil into chemicals, Chief Executive Officer Amin Nasser said. Aramco sees demand for goods such as plastics outlasting the growth in consumption for gasoline and diesel amid the energy transition."We are looking currently at a number of investments in China that will be announced in due course this year and next year,” Nasser said on an earning call on Tuesday. He also mentioned South Korea and India as potential investment destinations.Aramco is already in talks to buy a 10% stake in China’s Hengli Petrochemical Ltd and is seeking similar deals with two other Chinese companies. It closed a separate $3.4bn deal for a stake in Rongsheng Petrochemical Co last year.The Saudi state-run company aims to eventually turn about 4mn barrels a day of crude into chemicals, from about 2mn currently, Nasser said. It’s looking to upgrade existing facilities in Saudi Arabia to be able to process more oil into petrochemicals, he said.On Wednesday, Aramco agreed to boost its stake in Saudi Arabia-based Rabigh Refining and Petrochemical Co with a $702mn deal.Nasser pointed to China’s push into energy transition technologies like solar panels and batteries that use more plastics and other products derived from oil as factors attracting investment."Our strategic drive to convert liquid into chemicals remains unchanged,” Chief Financial Officer Ziad al-Murshed said on the same call Tuesday. "Our highest priority is to do this in China for two reasons. One is it is the biggest market and, two, it is where the liquid-to-chemical expansions are happening.”A big part of that push involves freeing up for exports as much as 1mn barrels a day of crude that it uses domestically for electricity generation. Aramco wants to ramp up gas production by 60% by the end of the decade, in part, for use in power plants in place of oil.The company is also looking to boost trading in liquefied natural gas by tapping into supply deals globally and buying more stakes in export terminals outside Saudi Arabia, Nasser said.Aramco last month signed an initial agreement for a stake in Sempra’s Texas LNG export plant in a deal that would include fuel shipments from the project. It has also agreed a 20-year non-binding contract to take 1.2mn tonnes per year of the liquefied fuel from NextDecade Corp’s planned project in Texas.
August 08, 2024 | 06:29 PM