Saudi Aramco signs MoU with China's Zhejiang Free Trade Zone

BEIJING: Oil producer Saudi Aramco signed a memorandum of understanding (MoU) with China’s Zhejiang Free Trade Zone in eastern China to expand downstream investment, the company said in a statement on Thursday.

Saudi Aramco, the world’s top oil exporter, bought a 9% stake in a 800,000 barrel-per-day complex built by Zhejiang Petrochemical, majority owned by private firm Zhejiang Rongsheng Holding Group, in the free trade zone in February.

The MoU includes a long-term crude oil supply agreement and the ability to utilise Zhejiang Petrochemical’s crude oil storage facility to serve Aramco’s customers in Asia.

The agreement will also allow the parties to evaluate potential opportunities for investment in other areas, the statement said.

These areas include refining, petrochemical production, storage, oil and natural gas trading, retail, and oil products distribution within the free trade zone, it said.

Aramco is a major investor in China’s energy sector. In February, Aramco inked a deal with Chinese defence conglomerate Norinco to develop a $10 billion refining and petrochemical complex and another agreement to buy a stake in Zhejiang Petrochemical.

Saudi Arabia was China’s biggest crude oil supplier in February, data from the general administration of Chinese customs showed on Monday, reclaiming the crown from Russia after ranking no. 2 in January.