Aramco’s strategic investments reflect a comprehensive approach to growth, encompassing areas such as renewable energy, petrochemicals, technology, and international partnerships

Over the past year, Aramco, a leading integrated energy and chemicals company, has embarked on a substantial expansion of its global footprint.

The company has significantly broadened its reach through the acquisition of several companies and strategic investments in pivotal global projects. These moves underscore Aramco’s commitment to diversifying its operations and strengthening its influence across various sectors as it positions itself at the forefront of the global energy transition.

Aramco’s strategic investments reflect a comprehensive approach to growth, encompassing areas such as renewable energy, petrochemicals, technology, and international partnerships. By venturing into these diverse sectors, Aramco not only enhances its market position but also supports broader goals of sustainable development and energy transition.

Apart from investing in refining and petrochemicals, the Saudi giant has made key investments in a wide variety of industries including the very first investment in liquefied natural gas (LNG) sector, in powertrain, hydrogen and petroleum retails sector. Its renewables focus reflected in shareholders’ agreement to participate in developing two solar projects, with an anticipated combined capacity of 2.66 GW.

Aramco has also allocated an additional $4 billion to its global venture capital arm, Aramco Ventures. It will more than double the capital allotted to Aramco Ventures, increasing its total investment allocation from $3 billion to $7 billion.

Here’s a look at some of the key investments made by Aramco over the last year.

PETRO RABIGH

Officials at the Horse Powertrain signing event

In the latest of Aramco’s acquisitions at the energy giant's home Saudi Arabia itself, Aramco has signed a definitive agreement to acquire an additional stake of approximately 22.5 per cent in Rabigh Refining and Petrochemical Co (Petro Rabigh), the refining and petrochemical complex located on Saudi Arabia’s west coast, from Sumitomo Chemical for $702 million.

Aramco and Tokyo-headquartered Sumitomo Chemical currently each own 37.5 per cent of shares in Petro Rabigh, which was listed on the Saudi Exchange in 2008. Upon completion of the transaction, which is priced at SR7 per share, Aramco will become Petro Rabigh’s largest shareholder with an equity stake of approximately 60 per cent, while Sumitomo Chemical will retain an equity stake of 15 per cent. The transaction is part of a package of financial measures intended to reinforce Petro Rabigh’s financial position.

All proceeds received by Sumitomo Chemical from the sale will be injected into Petro Rabigh, through a mechanism to be agreed with Petro Rabigh. Aramco will also provide additional funds to Petro Rabigh, via a mechanism also to be agreed, matching the $702 million from Sumitomo Chemical to improve Petro Rabigh’s financial position and support Petro Rabigh’s future strategy, bringing the aggregate injection amount to $1.4 billion.

In addition, Aramco and Sumitomo Chemical have agreed to a phased waiver of shareholder loans of $750 million each, which will result in a $1.5 billion direct reduction in Petro Rabigh’s liabilities.

Aramco invests in solar projects through Sapco

These measures are expected to improve Petro Rabigh’s balance sheet and cash liquidity as part of a remedial plan that Aramco and Sumitomo Chemical intend to explore with Petro Rabigh, which also includes initiatives to upgrade the refinery with the aim of helping improve the profitability of the business. The agreement also aligns with Aramco’s downstream expansion and Sumitomo Chemical’s move away from commodity chemicals toward specialty chemicals.

BLUE HYDROGEN INDUSTRIAL GASES COMPANY

Aramco has signed definitive agreements to acquire an equity interest in the Jubail-based Blue Hydrogen Industrial Gases Company (BHIG), a wholly-owned subsidiary of Air Products Qudra (APQ). The transaction, which is subject to standard closing conditions, will also include options for Aramco to offtake hydrogen and nitrogen.

Building on its efforts to develop a lower-carbon hydrogen business and expand its portfolio of alternative energy solutions, Aramco expects its investment in BHIG will contribute to the development of a lower-carbon hydrogen network in Saudi Arabia’s Eastern Province, serving both domestic and regional customers. Upon completion of the transaction, Aramco and APQ, a joint venture between Air Products and Qudra Energy, are expected to each own a 50 per cent stake in BHIG.

Ashraf Al Ghazzawi, Aramco Executive Vice President of Strategy & Corporate Development, said: 'This investment highlights Aramco’s ambition to expand its new energies portfolio and grow its lower-carbon hydrogen business. We are delighted to partner with APQ on this journey and believe there are promising commercial opportunities for hydrogen with lower emissions. We intend to leverage our growing capabilities in carbon capture and storage (CCS), as well as our technical expertise in hydrogen, with the ambition to support the establishment of a vibrant marketplace for lower-carbon hydrogen — helping lay the foundations of a future energy system.'

BHIG, which is designed to produce lower-carbon hydrogen while capturing and storing CO2, is intended to commence commercial operations in coordination with Aramco’s CCS activities.

HORSE POWERTRAIN LIMITED

Aramco and Hengli Group officials at the MoU signing ceremony

Aramco, one of the world’s leading integrated energy and chemicals companies, through a wholly owned subsidiary has signed definitive agreements to acquire a 10 per cent equity interest in Horse Powertrain Limited, the new global powertrain solutions company, alongside Renault Group, Zhejiang Geely Holding Group, and Geely Automobile Holdings Limited. Horse powertrain Limited was formed on May 31, 2024, by Renault Group and Geely and is incorporated and headquartered in London, UK.

Aramco will acquire the interest in Horse Powertrain in equal parts from Renault Group and Geely, which will each retain 45 per cent equity stakes. The price to be paid by Aramco at closing, which is subject to customary closing conditions including the receipt of regulatory approvals, will be based on a €7.4 billion ($8.06 billion) enterprise valuation.

This investment aims to enhance Aramco’s contribution to the global energy transition through the development and commercialisation of more efficient mobility solutions. The agreements also include collaboration arrangements for Aramco and Valvoline on technologies, fuels, and lubricants to collectively improve the performance of Horse Powertrain Limited internal combustion engines (ICE).

Ahmad O Al Khowaiter, Aramco Executive Vice President of Technology & Innovation, said: 'Aramco’s investment is expected to directly contribute to the development and deployment of affordable, efficient, and lower-carbon emission internal combustion engines globally. With Geely and Renault, we plan to leverage our collective expertise and resources to support ground-breaking advances in both engine and fuel technologies. With a strong emphasis on innovation, our goal is to provide solutions that can help reduce transport gas emissions while meeting the needs of both vehicle manufacturers and motorists. In securing long-term partnership between Valvoline Global and Horse Powertrain Limited, Renault Group, and Geely in connection with this investment, we are also demonstrating Aramco’s ability to both create and capture value at the global level.'

PORT ARTHUR LNG PHASE 2 EXPANSION

Aramco and Sempra, one of North America’s leading energy infrastructure companies, have announced that their respective subsidiaries have executed a non-binding Heads of Agreement (HoA) for a 20-year sale and purchase agreement (SPA) for liquefied natural gas (LNG) offtake of 5.0 million tonnes per annum (Mtpa) from the Port Arthur LNG Phase 2 expansion project. The HoA further contemplates Aramco’s 25 per cent participation in the project-level equity of Phase 2.

The parties expect to execute a binding LNG SPA and definitive equity agreements with terms substantially equivalent to those in the HoA, with the SPA and equity agreements subject to a number of conditions.

Nasir Al-Naimi, Aramco Upstream President, said: 'We are excited to take this next step into the LNG sector. As a potential strategic partner in the Port Arthur LNG Phase 2 project, Aramco is well placed to grow its gas portfolio with the aim of meeting the world’s growing need for lower-carbon sources of energy. This agreement is a major step in Aramco’s strategy to become a leading global LNG player.'

Port Arthur LNG is a natural gas liquefaction and export terminal in Southeast Texas with direct access to the Gulf of Mexico. The Port Arthur LNG Phase 1 project is currently under construction and consists of trains 1 and 2, as well as two LNG storage tanks and associated facilities. The Port Arthur LNG Phase 2 project is a competitively positioned expansion of the site to include the addition of up to two trains capable of producing up to 13 Mtpa.

At the heart of Sempra Infrastructure’s flagship Port Arthur Energy Hub, Port Arthur LNG has potential to expand to a total of eight trains, which would position it as one of the world’s most significant LNG export facilities. The facility is expected to play an important role in enhancing global energy security and resilience. Moreover, Sempra Infrastructure is actively advancing infrastructure projects within the Port Arthur Energy Hub, addressing both the rising demand for lower-carbon fuels and reduction. This includes the proposed Titan Carbon Sequestration project.

GAS & OIL PAKISTAN

Aramco has progressed in its global retail expansion by completing the acquisition of a 40 per cent equity stake in Gas & Oil Pakistan (GO).

GO is a diversified downstream fuels, lubricants and retail store operator in Pakistan with a network of more than 1,200 retail fuel stations. The acquisition, first announced in December 2023, represents Aramco’s first Downstream retail investment in Pakistan and signals the company’s growing retail presence in high-value markets.

Yasser Mufti, Aramco Executive Vice President of Products & Customers, said: 'Our global retail expansion is gaining pace and this acquisition is an important next step on our journey. Through our strategic partnership with GO, we look forward to supplying Aramco’s high-quality products and services to valued customers in Pakistan. We are also delighted to welcome another high-caliber addition to Aramco’s growing network of global partners, and look forward to combining our resources and expertise to unlock new opportunities and further grow the Aramco brand overseas.'

JV WITH RONGSHENG

The Saudi giant is exploring the formation of a joint venture in the Saudi Aramco Jubail Refinery Company (SASREF) with Chinese partner Rongsheng Petrochemical Co and significant investments in the Saudi and Chinese petrochemical sectors, in partnership with Rongsheng.

The company recently signed a cooperation framework agreement that envisions Rongsheng’s potential acquisition of a 50 per cent stake in SASREF. The agreement also lays the groundwork for the development of a liquids-to-chemicals expansion project at SASREF, in addition to Aramco’s potential acquisition of a 50 per cent stake in Rongsheng affiliate Ningbo Zhongjin Petrochemical Co (ZJPC) and participation in ZJPC’s expansion project.

Mohammed Al Qahtani, Aramco Downstream President, said: 'These discussions highlight our ambition to advance our liquids-to-chemicals strategy with strategic partner Rongsheng, both in the Kingdom of Saudi Arabia and China. In building on our existing relationship, we aim to advance our expansion in a key geography and attract new investment to the Saudi downstream sector.'

In July 2023, Aramco acquired a 10 per cent interest in Rongsheng through its subsidiary Aramco Overseas Company, based in the Netherlands. Rongsheng in turn owns a 100 per cent equity interest in ZJPC, which operates an aromatics production complex and has an interest in a joint venture that produces purified terephthalic acid.

ESMAX DISTRIBUCIÓN

In March, Aramco acquired a 100 per cent equity stake in Esmax Distribución (Esmax), a leading diversified downstream fuels and lubricants retailer in Chile.

Esmax has a national presence that includes retail fuel stations, airport operations, fuel distribution terminals and a lubricant blending plant.

The transaction, which was first announced in September 2023, represents Aramco’s first Downstream retail investment in South America and illustrates the attractiveness of this market, and supports the company’s strategic goal to strengthen its Downstream value chain.

Yasser Mufti, Aramco Executive Vice-President of Products & Customers, said: 'We are delighted to conclude the acquisition of Esmax and look forward to working with the outstanding team on the ground in Chile to achieve our shared ambitions. Aramco aims to be a primary global retail player and this deal combines our high quality products and services, including Valvoline lubricants, with the experience and quality of an established operator in Chile.'

MIDOCEAN ENERGY

In September 2023, Aramco signed definitive agreements to acquire a strategic minority stake in MidOcean Energy for $500 million. MidOcean Energy is a liquefied natural gas (LNG) company formed and managed by EIG, a leading institutional investor in the global energy and infrastructure sectors.

MidOcean Energy is currently in the process of acquiring interests in four Australian LNG projects, with a growth strategy to create a diversified global LNG business. The strategic partnership with MidOcean Energy marks Aramco’s first international investment in LNG.

The agreement builds on the relationship between Aramco and EIG, which was part of a consortium that acquired a 49 per cent stake in Aramco Oil Pipelines Company, a subsidiary of Aramco, in 2021.

Amin H Nasser, Aramco President & CEO, said: 'We are pleased to be strengthening our strategic partnership with EIG through this acquisition, which marks Aramco’s first international investment in LNG. We anticipate strong demand-led growth for LNG as the world continues on its energy transition journey, with gas being a vital fuel and feedstock in various industries. We believe that gas will be important in meeting the world’s rising need for secure, accessible and more sustainable energy.'

HENGLI GROUP

Aramco has entered into discussions with Hengli Group regarding the potential acquisition of a 10 per cent stake in Hengli Petrochemical Co, subject to due diligence and required regulatory clearances.

The companies have signed a memorandum of understanding (MoU) regarding the proposed transaction, which aligns with Aramco’s strategy to expand its downstream presence in key high-value markets, advance its liquids-to-chemicals program, and secure long-term crude oil supply agreements.

Hengli Petrochemical, a controlled subsidiary of Hengli Group, owns and operates a 400,000 barrel per day refinery and integrated chemicals complex in Liaoning Province, China, and several plants and production facilities in China’s Jiangsu and Guangdong Provinces.

VALVOLINE GLOBAL PRODUCTS BUSINESS

Complementing Aramco’s premium-branded lubricant products, the company last year completed its acquisition of Valvoline’s Global Products business (Valvoline Global Operations) for $2.65 billion, through one of its wholly-owned subsidiaries.

The acquisition is expected to optimise Aramco’s global base oils production capabilities, and expand its R&D activities and partnerships with original equipment manufacturers.

With this acquisition, which follows the signing of an equity purchase agreement by the companies announced on August 2022, Aramco accelerates its aim to become one of the world's pre-eminent integrated, branded lubricants players.

Aramco now owns the Valvoline brand with respect to the products business, and Valvoline will own the Valvoline brand with respect to its retail services business. Aramco and Valvoline plan to work together to continue to grow the Valvoline brand equity globally.

Valvoline Global Operations, which will continue to be headquartered in Lexington Kentucky, is a worldwide leader in automotive and industrial solutions, creating future-ready products and best-in-class services for partners around the globe.

RENEWABLES

Advancing its role in renewables development, and in line with its aim to capitalise on the kingdom’s solar resources, Aramco has entered into a shareholders’ agreement with the Public Investment Fund (PIF) and ACWA Power for the development of the Al Shuaibah 1 and Al Shuaibah 2 photovoltaic solar projects in Saudi Arabia. With an expected combined capacity of 2.66 GW.

Aramco’s investment in the solar projects through Sapco is its second participation in the National Renewable Energy Program, aligning with the company’s objectives of achieving net-zero of operational scope-1 and scope-2 emissions by 2050.

Situated in Al Shuaibah in the Makkah Province, the Al Shuaibah PV 1 and Al Shuaibah PV 2 will have a capacity of 600 MW and 2,031 MW respectively, and are capable of powering approximately 450,000 households. The total investment in the plant amounts to $2.37 billion, and commercial operations will commence in 2025.

STEEL PLATE MANUFACTURING COMPLEX

As part of Aramco’s corporate development activities, and to enhance its supply chain ecosystem, the company also signed a shareholders’ agreement with Baoshan Iron & Steel (Boasteel) and PIF to establish a world-class steel plate manufacturing complex in the Kingdom of Saudi Arabia, as well as a shareholders’ agreement with DHL for a new Procurement and Logistics Hub.

The joint venture complex is expected to be located in Ras Al-Khair Industrial City, one of the four new Special Economic Zones announced by HRH Prince Mohammed bin Salman, Crown Prince, Prime Minister and Chairman of the Council of Economic and Development Affairs.

The complex would bring together Aramco's unrivaled energy and industrial services ecosystem, Baosteel's advanced steel plate industry capability and PIF's strong financial capabilities and investment expertise. It would be the first facility of its kind in the kingdom and the GCC region, advancing the regional steel industry ecosystem. The project aims to enhance the domestic manufacturing sector through localising the production of heavy steel plates, transferring knowledge and creating export opportunities.

The facility is expected to have a steel plate production capacity of up to 1.5 million tonnes per year. It would also be equipped with a natural gas-based direct reduced iron (DRI) furnace and an electric arc furnace, which aims to reduce CO2 emissions from the steel-making process by up to 60 per cent compared to a traditional blast furnace. The DRI plant would be compatible with hydrogen without the need for major equipment modifications, potentially reducing CO2 emissions by up to 90 per cent in the future.

PROCUREMENT AND LOGISTICS HUB

Aramco and international contract logistics provider DHL Supply Chain last year signed a shareholders' agreement for a new Procurement and Logistics Hub in Saudi Arabia, to enhance supply chain efficiency and sustainability. It would be the region's first such hub catering to customers in the industrial, energy, chemical and petrochemical sectors.

The joint venture aims to be operational in 2025 and provide reliable end-to-end integrated procurement and supply chain services for companies across the industrial, energy, chemical and petrochemical sectors. The joint venture would initially focus on Saudi Arabia, with aspirations to expand across the Mena region.

Aramco's pre-eminent energy and industrial supply chain ecosystem and DHL's world-class logistics expertise are expected to enable the joint venture to add value in meeting customers' supply chain purchasing, warehouse and inventory management, transportation and reverse logistics needs.

The aim is for the joint venture to achieve industry best practices in procurement and supply chain management, as well as the deployment of more sustainable supply chain, transport and warehousing solutions.

By Sree Bhat