Taiwan firms plan US$4.5b China project

Taipei, 19th August, 2011 - A group of Taiwan firms have signed a contract to set up a US$4.5bil refinery complex in China, defying a ban against such projects imposed by the island's government, said officials and media said.

The group, led by Ho Tung Chemical, inked the investment agreement with the government of southeast China's Fujian province and with Sinopec, China's biggest petrochemical group, in Beijing on Tuesday.

The agreement was signed after Taiwan's government, citing environmental considerations, rejected a similar, controversial US$20bil project for a giant refinery and petrochemical complex in western Taiwan.

“Since the project has hit a snag, the government must find a way out for local petrochemical companies, or the companies will gradually disappear,” Ho Tung founder Chen Wu-hsiung told the Taipei-based Economic Daily News.

Local companies are still barred from investing in China's refinery industry and some high-tech sectors despite eased tensions following the election of Beijing-friendly politician Ma Ying-jeou as Taiwan president in 2008.

The planned venture, based in Fujian, will have capacity to refine an annual 16 million tonnes of oil and 1.2 million tonnes of ethylene, a key organic compound widely used in industry. - AFP - TheStar

Sinopec Hong Kong Lowers Oil Price

Hong Kong, 11th August – The Hong Kong subsidiary of Sinopec announced it lowered prices of gasoline and diesel by HK$0.1 and HK$0.18 per liter yesterday, reports the Beijing News. Premium gasoline, gasoline, and diesel prices in Hong Kong will be HK$17.34, HK$16.4, and HK$11.6 per liter after the price cut.

Shell Hong Kong also lowered its gasoline and diesel prices yesterday to the same level of Sinopec Hong Kong. Shell explained that its own price adjustment was a reaction to Singapore’s gasoline FOB price, the benchmark for oil prices in the Asia-Pacific region.

In light of the US debt ceiling crisis, international oil prices have tumbled for three straight trading sessions. However, domestic oil prices stood still due to a backward pricing system, the report said.

Sinopec announced yesterday that it will increase gasoline production to meet surging demand in the forthcoming peak season. - CapitalVue

Sinopec Buys Indonesia Assets From Chevron

Indonesia, 3rd August - Sinopec subsidiary, Sinopec International Exploration and Production Corporation intends to acquire 18-percent stakes in Chevron’s three gas projects in Rapak, Ganal and the Makassar Strait in Indonesia, reports caijing.com.cn, citing a company filing. The acquisition has already won approval from the National Development and Reform Commission (NDRC).

The projects are expected to together have a gas production volume of 2.3 billion cubic meters between 2015 and 2016.

Sinopec previously spent $680 million yuan to participate in Chevron’s Gendalo-Gehem deep water gas project in Indonesia. - CapitalVue

Sinopec Adjusts HK Oil Price 3 Times In 3 Months

Hong Kong, 1st August – China Petroleum & Chemical Corporation (Sinopec) and Shell decided to increase fuel prices by 0.18 yuan per liter as a result of rise in international prices, reports yicai.com. The after-tax selling prices of two types of fuel hit HK$16.7 and HK$17.64, respectively.

Sinopec lowered its fuel prices twice in Hong Kong in May and July.

In mainland China, the National Development Reform (NDR) never made any adjustment after it raised its price twice, in February and April. - CapitalVue

Sinopec to build US$91mil lubricant plant in Singapore

Singapore, July 28th, 2011 - Sinopec Lubricants, a subsidiary of the world's second largest oil refiner, will build a US$91m lubricant plant in Singapore.

The facility at Tuas will be China Petroleum and Chemical Corporation's (Sinopec) first lubricant plant outside of China and is part of its efforts to establish its brand presence in Southeast Asia.

Sinopec may only be behind Exxon Mobil in the business globally but the Chinese company still has a long way to go in terms of brand recognition outside of the mainland.

Sinopec hopes that its lubricant plant in Tuas will help increase its sales in Australia, New Zealand and Southeast Asia.

The company said it will now also reap some measure of savings as it is now based closer to customers in these places.

Pei Wen Jun, general manager of Sinopec Lubricants Singapore, said: "Well, cost savings are one factor but the main point of being here is to provide a higher level of efficiency to our customers based here."

The company will begin operating the lubricant plant with a initial production capacity of 100,000 metric tons annually. The lubricant is destined for customers in the marine and automobile industries.

Sinopec said it expects that production may increase 50 per cent to 150,000 metric tons within three to five years of operation.

It is also open to the possibility of replicating its investment strategy around the region.

Mr Pei said: "We will track what is needed in the market and see how it develops to determine if we will make more investments in Southeast Asia."

While the Singapore plant will account for only five per cent of its total lubricant production, it sees the republic as a crucial step in its broader strategy to internationalise its brand presence.

The lubricant plant in Tuas is set to hire up to 80 new staff and will function as a regional hub, engaging in production, servicing and logistics for a variety of customers including those in the automobile and marine industries. - CNA