China's state-owned giant is diversifying into coal-to-chemicals and a joint gas venture.
Fu Chengyu (left) launches Sinopec Great Wall Energy Image: Sinopec |
As refining losses continue to affect domestics margins, state-owned enterprises are looking to diversify their energy portfolios and spread risk. China Petroleum & Chemical Corp (Sinopec Asia's largest refiner, has recently annouced two major projects to do just this: two joint ventures with China Gas Holdings Ltd and the formation of a coal-to-chemical subsidiary.
The firm has established Sinopec Great Wall Energy Chemical Co Ltd as a wholly-owned subsidiary of Sinopec, which has plans to become a leader in China's growing coal-to-chemical market within the next eight to ten years. Group Chairman Fu Chengyu believes coal-to-chemical businesses are strategically important as abundant domestic coal reserves would decrease reliance on imports.
Fu's strategy for the next two to three decades will also focus on the natural gas sector. Currently China's second-biggest producer of natural gas, Sinopec will share resources with China Gas to distribute liquified petroleum gas, compressed natural gas and liquified natural gas. Sinopec had previously planned a takeover of China Gas with ENN Energy Holdings Ltd in December, but dropped the deal after failing to gain the necessary regulatory approval.