Saudi Aramco has inked an agreement with China’s Zhejiang Free Trade Zone, following which the Zhoushan Government emphasised its support for incentivising Saudi Aramco’s greater investment in Zhejiang’s future downstream growth.

The memorandum of understanding (MoU) was signed by Yuan Jiajun, Governor of the Chinese province of Zhejiang during a visit to Saudi Aramco’s headquarters in Dhahran. Along with agreements signed during HRH Crown Prince Mohammed Bin Salman’s visit to China in February this year, the new MoU is said to facilitate Saudi Aramco’s planned acquisition of a 9% stake in the Zhejiang integrated refinery and petrochemical complex.

The deal also includes a long-term crude oil supply agreement and enables the use of Zhejiang Petrochemical’s large crude oil storage facility to serve the Saudi firm’s customers in Asia. The activities are said to reflect the company’s strategy to expand its presence in the Chinese energy sector.

According to a statement, the agreement cements Saudi Aramco’s participation in the 400,000 barrels per day refinery from Phase III of the Zhoushan Petrochemical Greenfield project. It also allows the parties to evaluate potential opportunities for investment in other parts of the value chain, including refining and petrochemical production, storage and trade of crude oil and natural gas, retail, as well as distribution of oil products within the Zhejiang Free Trade Zone.