Rongsheng is also negotiating to sell Aramco an up to a 50% stake in its unit Ningbo Zhongjin Petrochemical Co, the Chinese company said in a statement to the Shenzhen stock exchange, citing a memorandum of understanding signed on Tuesday.

Saudi Aramco Jubail Refinery Company (SASREF), located in Jubail Industrial city, processes crude oil into petroleum products and has a production capacity of 305,000 barrels per day (bpd), its website shows.

If the SASREF stake acquisition happens, it would be the first investment by a private Chinese firm in a significant Saudi refining asset.

The companies also discussed expanding the Saudi refinery and upgrading its products.

The final investment decision is pending due diligence on Ningbo Zhongjin and SASREF by the two buyers respectively, Rongsheng Petrochemical said.

Aramco said in March it had agreed to acquire a 10% stake in Rongsheng, an investment attached to a 20-year crude oil supply deal with Rongsheng-controlled Zhejiang Petrochemical Corp. The deal closed in July at a valuation of $3.4 billion.

It has also been in talks to buy a 10% stake in Shandong Yulong Petrochemical Co, which is building a refinery complex that can process 400,000 barrels of crude a day in eastern China's Shandong province.

In September, Aramco announced plans to become a strategic investor in another private Chinese refiner Jiangsu Shenghong Petrochemical, which operates a 320,000 bpd refinery and petrochemical complex in the eastern province of Jiangsu.

(Reporting by Aizhu Chen, Andrew Hayley and Roxanne Liu, Editing by Louise Heavens and Barbara Lewis)