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Tue 12 Nov 2019 01:56 PM

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ADNOC, China's Rongsheng ink deal to explore growth opportunities

Agreement will focus on the sale of refined products from ADNOC to Rongsheng, downstream investment opportunities and the supply and delivery of LNG

ADNOC, China's Rongsheng ink deal to explore growth opportunities

The deal was signed by Dr Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO, and Li Shuirong, chairman of Rongsheng Group.

Abu Dhabi National Oil Company (ADNOC) announced on Tuesday that it has signed an agreement with China’s Rongsheng Petrochemical Co Ltd to explore domestic and international growth opportunities which will support the delivery of its 2030 smart growth strategy.

The agreement will focus on the sale of refined products from ADNOC to Rongsheng, downstream investment opportunities in both China and the UAE and the supply and delivery of liquified natural gas (LNG) to Rongsheng.

The deal was signed by Dr Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO, and Li Shuirong, chairman of Rongsheng Group.

Al Jaber said: “This framework agreement builds on the existing crude oil supply relationship between ADNOC and Rongsheng, which we are keen to enhance. The agreement covers domestic and international growth opportunities across a range of sectors, which have the potential to open new markets for our growing portfolio of products and attract investment to support our downstream and gas expansion plans.

“As we continue to successfully deliver our 2030 smart growth strategy, we are committed to working with partners who enable us to unlock and maximize value and help us secure access to new centers of global demand.”

Under the terms of the agreement, ADNOC and Rongsheng will explore opportunities for increasing the volume and variety of refined products sales to Rongsheng as well as ADNOC’s active participation as Rongsheng’s strategic partner in refinery and petrochemical opportunities, including an investment in Rongsheng’s downstream complex.

In return, Rongsheng will also explore potential investments in ADNOC’s downstream industrial ecosystem in Ruwais, including the proposed gasoline aromatics plant and the potential for ADNOC to supply and deliver LNG for se by Rongsheng within its production complexes in China.

Shuirong said: “This framework agreement is a key milestone in Rongsheng Petrochemical’s strategic international expansion. ADNOC is an important trading partner, and we are confident of the win-win benefits of this partnership, particularly in realizing opportunities in the downstream space in Asia.”

Rongsheng is one of the leading companies in China’s petrochemical and textile industry. 

China is the world's second-largest oil consumer, and Chinese energy companies have steadily increased their participation in ADNOC’s upstream and downstream operations.

At the same time, ADNOC has identified China as an important growth market for its crude oil and petrochemical products, as it moves towards boosting its oil production capacity to 4 million barrels per day (mbpd) by the end of 2020 and 5mbpd in 2030.

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