Saudi Aramco has announced signing a preliminary agreement with China’s Zhejiang Free Trade Zone, as the Saudi energy giant looks to acquire a 9 per cent stake in an integrated refining and chemicals complex in the province.

The memorandum of understanding will also include a long-term crude oil supply agreement and will allow Aramco to use Zhejiang Petrochemical's storage facility to cater to clients in Asia.

The agreement strengthens Aramco’s participation in the 400,000 barrel-a-day (b/d) Zhoushan greenfield petrochemicals scheme, while allowing for flexibility in investment across other areas of the value chain, the company said in a statement.

Aramco will look at refining and petrochemical production, storage, and trading in crude and natural gas within the free zone, it said.

During Saudi Crown Prince Mohammed bin Salman’s visit to Beijing in February this year, Aramco signalled interest in entering China’s retail fuel segment following an agreement with Zhejiang Energy, which includes building up a network over five years in the province.

The retail segment will eventually be integrated with the Zhejiang Petrochemical complex.

The Zhejiang Petrochemical facility, in which Aramco has invested, includes a newly built 400,000 b/d refinery, with a 1.4 million tonne-a-year (t/y) ethylene cracker and a 5.2 million t/y aromatics unit.