South Korean refiner Hyundai Oilbank Co said on Thursday it has signed long-term crude oil supply deals with its new shareholder Saudi Aramco and its trading arm.
The Saudi state energy firm agreed in April to buy a 17 per cent stake in Hyundai Oilbank’s oil processing operations for about $1.24bn. The deal also includes an option to buy an additional 2.9 per cent stake in the refiner.
In the latest agreements inked earlier this week, Saudi Aramco will supply 150,000 barrels per day (bpd) of crude to the refiner for 20 years, Hyundai Oilbank said in a regulatory filing.
The refiner also signed a deal with Aramco Trading to buy 100,000 bpd of non-Saudi crude. Both deals will run from January 2020 to December 2039.
The deals mean that Saudi Aramco will supply about 38 per cent of Hyundai Oilbank’s crude requirement, helping the world’s largest oil exporter lock in a long-term outlet for its crude.
Saudi Aramco is on the hunt for refining and petrochemical assets in Asia and wants to expand its oil trading business as it diversifies from oil and gas production.
Hyundai Oilbank currently has a term contract with Saudi Aramco to buy 50,000 bpd of oil, a source with knowledge of the matter said.
Hyundai Oilbank, South Korea’s smallest refiner by capacity, has a total of 650,000 bpd of refining capacity in the southwestern city of Daesan and aims to expand its petrochemical business.