Saudi Arabian oil company Aramco said on Thursday that the company has signed a Memorandum of Understanding with Nanshan Group Co Ltd, Shandong Energy Group Co Ltd and Shandong Yulong Petrochemical Co Ltd to facilitate discussions relating to the possible acquisition by Aramco of a 10 percent strategic equity interest in Shandong Yulong Petrochemical Co Ltd.

The possible acquisition of the project, located at Longkou, Yantai in China's Shandong province, is subject to due diligence, negotiation of transaction documents and required regulatory clearance, it said.

Shandong Yulong is currently in the process of completing the construction of a refining and petrochemicals complex that is designed to process around 400,000 barrels per day (bpd) of crude oil and produce a large volume of petrochemicals and derivatives.