China Merchants Group (CMG) is eying more tanker and logistics businesses from Rongsheng Petrochemical, with the Chinese private player’s new petrochemical complex starting trial operation.
According to company statements, CMG and Rongsheng have signed a strategic agreement to promote further cooperation in the shipping, logistics and financing sectors.
“With the synergy between different CMG units, we are aiming to provide comprehensive services to Rongsheng,” CMG executive vice-president Wang Hong said.
“We want to enhance our cooperation in transporting crude, petroleum and chemical products as well as container shipping.”
State-owned CMG controls the world’s largest VLCC fleet via its Shanghai-listed subsidiary China Merchants Energy Shipping. The conglomerate also owns a large fleet of product and chemical tankers via Nanjing Tanker, while Sinotrans Shipping, another CMG unit, operates feeder containerships.
The deal has come as Rongsheng starts to commission the Zhoushan-based facility, which can process 40 million tonnes of crude and produce 1.4 million tonnes of ethylene and 10.4 million tonnes of aromatic products per year.
Half of the capacity is due to come online this year, while the remaining is scheduled for 2020.
“We have completed the construction for the first phase and finished adjusting equipment,” Rongsheng said. “We have begun the initial operation.”
Rongsheng, not related to former shipbuilder Rongsheng Heavy Industries, owns 51% of the petrochemical complex that has a budget of CNY 173bn ($25bn).
The facility is on track to receive equity investment from Saudi Aramco, pointing to more opportunities to ship crude for CMG units.
In February, the Saudi national oil company signed a memoranda of understanding with the Zhoushan government to acquire its 9% stake in the facility.
“Saudi Aramco’s involvement in the project will come with a long-term crude supply agreement and the ability to utilise…[the facility’s] large crude oil storage facility to serve its customers in the Asian region,” the company said at the time.
