Investments: Aramco to acquire 10% stake in Hengli Petrochemical; Suzano Ventures invests US$5 mn in Bioform to expand biobased plastic alternatives

State-owned Saudi Aramco, one of the world’s leading integrated energy and chemicals companies, has entered into discussions with China’s Hengli Group Co. regarding the potential acquisition of a 10% stake in Hengli Petrochemical, subject to due diligence and required regulatory clearances. No financial details or timeline were provided.

The companies 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 Jiangsu and Guangdong Provinces.

Mohammed Y. Al Qahtani, Aramco Downstream President, said: “This MoU supports our efforts to grow our global downstream footprint. We continue to explore new opportunities in important markets, as we seek to progress in our liquids-to-chemicals strategy. We look forward to forging new partnerships and are excited by the prospect of expanding our presence in the important Chinese market.”

In January, Chinese privately-controlled refiner Rongsheng Petrochemical and Aramco announced they were in talks to take a 50% stake in each other's refineries in China and Saudi Arabia.

Last year, Aramco closed a deal valued at US$3.4 billion to buy a 10% stake in Rongsheng, attached to a 20-year crude oil supply deal with Rongsheng-controlled Zhejiang Petrochemical Corp.

Aramco has also been in talks to buy a 10% stake in Shandong Yulong Petrochemical Co and last year announced plans to become a strategic investor in another private Chinese refiner Jiangsu Shenghong Petrochemical.

Aramco subsidiary Sabic said in January it will go ahead with building a petrochemical complex in southeastern China's Fujian province, expected to cost around US$6.4 billion, in a joint venture with state-owned Fujian Fuhua Gulei Petrochemical.

Meanwhile in other news, Suzano Ventures, the corporate venture capital arm of Suzano, the world’s largest market pulp producer, is funding up to US$5 million for Canadian start-up, Bioform Technologies.

Bioform’s innovative materials, developed at the University of British Columbia, offer sustainable, bio-based alternatives to single-use plastics

Financing will be used to demonstrate the potential for Bioform’s technology to rapidly scale and reach cost-competitiveness with single-use plastics by modifying manufacturing processes widely used in the pulp and paper industry

Bioform’s proprietary technology rapidly produces wood pulp-reinforced hydrogels to create high-performance plastic alternatives, which can be made using Suzano’s wood pulp fibre as a key input. Bioform’s materials have the potential to be home compostable or recycled through existing paper recycling processes and do not require fossil-based inputs. The technology is highly versatile and has a number of applications where it could replace conventional single-use plastics, including paper recyclable thermoformable films for packaging applications and compostable heat-sealable films for pouches, agriculture, and garbage bags.

With the potential to offer an 80% lower carbon footprint than conventional single-use plastics, Bioform’s technology has similar or enhanced product performance to conventional plastics in areas such as tensile strength and permeability for oxygen or water vapour.

Bioform has previously raised US$2.4 million from direct investments and US$1.2 million from non-dilutive sources to streamline its technology and validate performance and processes in its labs. This funding from Suzano Ventures will enable the company to realize a demonstration facility to pilot its manufacturing process and expand its team and capabilities.

Headquartered in São Paulo, Brazil, Suzano is the world’s largest market pulp producer and one of Latin America’s largest paper manufacturers. Producing its pulp entirely from farmed eucalyptus, the company’s products reach over 2 billion people around the world in over 100 countries. Suzano has had a presence in Canada since 2015, with a large R&D centre for pulp, paper, and biomaterials technologies located in Vancouver.

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