Adnoc signs agreement with Chinese firm to explore sale of refined products

The deal also looks at the possibility of supplying LNG to Rongsheng Petrochemical

At work in the Panorama Digital Command Centre. Bloomberg

Abu Dhabi National Oil Company signed an agreement with Rongsheng Petrochemical of China to explore domestic and international opportunities as it seeks to sell more products to customers in East Asia.

The deal covers the sale of refined products from Adnoc to Rongsheng and the supply of liquefied natural gas to the Chinese company.

"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," said Dr Sultan Al Jaber, Adnoc Group chief executive and UAE Minister of State.

Adnoc expects to invest about $45 billion (Dh165.3bn) in the downstream sector with partners over the next five years in Ruwais, with its domestic refining and chemicals capacities set to double and treble, respectively.

The Abu Dhabi company plans to build the world's largest integrated refinery by 2025.

Rongsheng, which also has interests in chemicals and textiles, is an investor in high-value oil and gas projects.

The company is developing a 40-million-tonne integrated refining and chemicals scheme in Zhejiang and holds a 40 per cent stake in Zhejiang Petroleum & Chemical Company.

Saudi Aramco is also considering opportunities in China's Zhejiang Free Trade Zone and is pursuing a 9 per cent stake in the refiner.

"The strategic co-operation with Adnoc will ensure that our ZPC project, which will have a refining capacity of up to 1m barrels per day of crude, has adequate supplies of feedstock," Li Shuirong, chairman of the Rongsheng Group, said.

National oil companies such as Adnoc have started negotiating and signing long-term contracts for products with buyers in East Asia in a push to secure market share and pivot business strategies to focus more on high-value downstream products.

Last November, Adnoc signed an agreement with Wanhua Petrochemical to supply up to 1m metric tonnes a year of liquefied petroleum gas over 10 years.