Saudi Aramco said this week that it may take a minority stake in a Chinese oil company – a deal that would give it an interest in yet another base oil operation.
The Saudi oil and chemical giant said in a news release Monday that it is in discussions to acquire 10% of Hengli Petrochemical Co., a Dalian, China-based petrochemical producer whose operations include an oil refinery and petrochemical complex on Changxing Island, off the seaport of Dalian in Northeast China.
The refinery has capacity to process 400,000 barrels per day of crude oil and includes a base oil plant capable of making 190,000 metric tons per year of API Group II base oils and 350,000 t/y of Group III. It was part of a large series of base oil projects that sprouted in China over the past two decades.
Aramco said called the negotiations part of its ongoing strategy of forming joint ventures and buying into companies both to provide steady customers for its crude oil and to grow in the value-added parts of the refining industry. For the past few years petrochemicals has become a particular focus.
Aramco owns a 70% stake in Luberef, a refiner that operates base oil plants in Yanbu and Jeddah, Saudi Arabia, with combined capacity to make 1.1 million t/y of Group I and II base oils. The other 30% of stock is publicly traded.
Aramco also owns United States oil company Motiva, whose operations include a Port Arthur, Texas, base oil plant with capacity to make 2 million t/y of mostly Group II oils. Aramco also owns a 63% stake in S-Oil, one of South Korea’s leading refiners and operator of a 2.1 million t/y plant making Group I, II and III base oils in the coastal city of Onsan.
The Saudi company coordinates the marketing of the base oils from all three companies under its Aramco brand.