M&As: Aramco to acquire 10% stake in Shenghong Petchem; ShawKwei invests US$34 mn in US battery materials firm

Saudi Aramco, one of the wo rld’s leading integrated energy and chemicals companies, and Jiangsu Eastern Shenghong Co (Eastern Shenghong) have signed a cooperation framework agreement to facilitate discussions relating to the possible acquisition by Aramco of a 10% strategic equity interest in Jiangsu Shenghong Petrochemical Industry Group Co (Shenghong Petrochemical), a wholly-owned subsidiary of Eastern Shenghong. Aramco did not disclose the financial details of the potential deal, which will be subject to due diligence and regulatory approvals.

Shenghong Petrochemical owns and operates a 320 million barrels/day integrated refinery and petrochemicals complex, a methanol-to-olefins and derivatives complex as well as a purified terephthalic acid production facility through its wholly-owned subsidiaries. The facilities are co-located in the Xuwei Petrochemical Industrial Park in Jiangsu Province. 

Under the agreement, it is intended that Aramco would supply Shenghong Petrochemical with crude oil and potentially other feedstocks. Aramco and Shenghong Petrochemical also intend to cooperate on the development of a large expansion project, subject to further discussions between the parties and the execution of definitive agreements. 

Mohammed Y. Al Qahtani, Aramco Downstream President, said: “Aramco looks forward to partnering with Eastern Shenghong to supply the reliable energy required for China’s long-term growth, development and energy security. The signing of this cooperation framework agreement is another significant milestone in Aramco’s Downstream strategy to increase conversion of Arabian crude oil to chemicals and to expand into the critically important Chinese market. We see China as an important partner not only for today but for decades to come.”

Eastern Shenghong, which is listed on the Shenzhen Stock Exchange, is a leading, vertically-integrated energy and chemicals enterprise which deploys advanced technologies in its new energy and materials businesses.

In July this year, Aramco acquired a 10% stake in China’s Rongsheng Petrochemical (Rongsheng).

In other news, Singapore-based private equity firm ShawKwei & Partners has invested US$34.3 million in US-based silicon battery materials manufacturer Group14. The latter manufactures an advanced silicon battery technology for lithium-ion batteries used in electric vehicles (EVs) and electronic products and devices. Some of the Group14 shareholders include BASF SE, Cabot Corp., Oman Investment Authority, Resonac Holding Corp. (formerly known as Showa Denko) and SK Materials, a subsidiary of South Korea’s SK Group.

Most of the lithium-ion batteries in today’s EVs use anodes made of graphite, which comes mainly from China.  By using silicon for the battery anode material instead of the more common graphite, Group14’s technology produces a lithium-silicon battery with significantly higher energy density and faster charging time.   

Group14’s patented silicon-carbon composite technology, SCC55, is already shipping from its first factory in Washington State to lithium-ion battery producers around the world. 

Group14 is constructing a second US-based commercial-scale-factory in Moses Lake, Washington and completing the commissioning of its joint venture factory in South Korea with SK Materials.   

In July 2023 Group14 acquired Schmid Silicon Technology Holding GmbH (Schmid Silicon) with its technologically advanced silane gas plant in Spreetal (Schwarze Pumpe), Germany. 

Group14 now has a secure supply of ultra-high-purity and low-carbon silane gas, which is a critical precursor for its silicon battery technology, SCC55.  Moreover, the acquisition of the facility and capabilities will insulate Group14’s customers and partners from potential supply chain disruptions, particularly in the automotive industry, and provide for integrated silicon battery technology manufacturing in Europe. 

Kyle Shaw, Founder/Managing Partner of ShawKwei & Partners said, "Our investment into Group14 follows the successful exit from ShawKwei’s investment with Schmid Silicon and its related group companies.  We see efficient and fast-charging batteries as critical to the clean energy transition in Asia as well as the USA and Europe.  Group14 is an excellent addition to ShawKwei & Partners’ other energy investments and exemplifies our strategy to invest in cutting-edge science and capabilities to accelerate decarbonisation and support the energy transition to a more sustainable future.”

ShawKwei & Partners is private equity investor with offices in Singapore, Hong Kong, San Francisco, and Shanghai managing industrial and energy businesses in Asia, the US, and Europe.

(PRA)

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