Saudi oil major Aramco signed today a Memorandum of Understanding (MoU) which includes a potential crude oil supply agreement and chemicals products offtake agreement, supporting Aramco’s role in building a thriving downstream sector in Shandong Province.
The move strengthens Aramco’s efforts to supply energy, petrochemicals and non-metallics to China as the company seeks to expand its liquids to chemicals capacity to up to 4 million barrels per day by 2030.
Shandong Energy Group is the third-largest coal mining group in the Asian country in terms of production volume. The company’s operations also include logistics, trading, power generation and the manufacture of machinery.
Last month, Saudi Aramco announced it would build a $7 billion refinery-integrated petrochemical steam cracker in South Korea through its S-Oil unit.
The project is expected to start in 2023 and be completed by 2026.
Aramco officials have repeatedly stressed that the petrochemicals industry is expected to be a big driver of crude oil demand in the next few decades as consumers increasingly switch to electric vehicles.
The oil major has also committed to convert 4 million barrels per day crude output into chemicals production by 2030, which it says is increasingly necessary in the energy transition for the sector to research and develop sustainable advanced materials for industrial-scale use in sectors such as housing and infrastructure.
