Asia's largest refiner is aiming to expand into gas projects and compete with fellow SOE PetroChina.
Fu Chengyu, chairman of China Petrochemical Corp (Sinopec has announced that Sinopec and ENN Energy Holdings Ltd will place a bid worth $2 billion (CNY 12.6 billion) for China Gas, a company which supplies 20 of the nation's 33 provinces. Fu claims the bid is a fair esimation of market value, and is an increase on the HK$3.50-a-share bid ($0.45 USD) made last December.
The proposed acquisition from the state-owned energy giant would give ENN and Sinopec access to 6.6 million China Gas customers and 42,000 industrial and commercial users. The deal would also increase competitiveness with PetroChina, which currently dominates China's gas distribution market through the listed company Kunlun Energy.
Sinopec and ENN had originally proposed a bid circulation date of 31 March, however this has since been extended to 15 May and may be extended further if the two companies need more time to prepare, which China Gas president Eric Leung has remarked as “extremely frustrating”. China Gas employees are also unsettled as rumours of potential workforce cuts have surrounded the takeover. However, Fu was keen to state that Sinopec develops is business "through growth, not by laying off workers.”