Sinopec and Saudi Aramco Unit Establish Joint Venture

Sinopec, the Chinese state-owned enterprise, announced on Monday the execution of an agreement with a subsidiary of Saudi Aramco to form a joint venture. The registered capital for this venture is set at 28.80 billion yuan, equivalent to $3.95 billion.

The agreement saw the participation of Sinopec, along with its subsidiary, Fujian Petroleum Chemical Industry Co., and Aramco Asia Singapore Pte. (AAS), the Singaporean arm of Saudi Aramco.

Sinopec and Fujian Petroleum Chemical Industry Co. will contribute 7.20 billion yuan and 14.40 billion yuan respectively, both in cash. AAS will provide the remaining capital, constituting 25% of the joint venture’s total registered capital.

The new entity, named Fujian Sinopec Aramco Refining and Petrochemical Co., will be involved in various operations. These include port activities, crude oil transportation, and other related operations at the refining and petrochemical complex located in the Gulei Port Economic Development Zone in Zhangzhou, Fujian province, China.

Construction of this complex began in November of the previous year through a collaboration between Sinopec and Saudi Aramco. This project aligns with Saudi Aramco’s strategy to broaden its downstream business beyond Saudi Arabia and aims to supply China with one million barrels of crude oil per day for oil-to-chemicals investments.

In a separate statement released on Monday, Sinopec reported a 27.6% decrease in first-quarter net profit, calculated under China Accounting Standards.