MOSCOW (MRC) -- Asia's top refiner, Sinopec Corp, is not interested in acquiring Shell's refinery or petrochemical plant in Singapore although it is keen on participating in a shale gas project in Saudi Arabia, as per Hydrocarbonprocessing.
Sinopec President Yu Baocai was speaking after sources last week told Reuters that Shell had hired Goldman Sachs to advise on a potential sale of its Singapore assets and that Sinopec was among the companies reviewing them.
However, Yu, speaking at a briefing in Hong Kong after the state-run oil and gas giant reported a 20% decline in interim earnings, said that Sinopec is interested in participating in Saudi Arabia's Jafurah shale gas project.
This is in line with an earlier Reuters report saying Sinopec and TotalEnergies were in separate discussions with state-run Saudi Aramco to invest in the Jafurah project, the largest shale gas development outside the U.S., with reserves estimated at 200 trillion cubic feet of raw gas.
Yu also said that Sinopec was one of the international companies invited by the Sri Lankan government to build a refinery there, and that it was evaluating the matter. Sri Lanka shortlisted Sinopec and commodities trader Vitol to become potential investors in a proposed export-oriented refinery in Hambantota.
Separately, Sinopec is set to start operating a retail fuel business in the island nation next month. Yu also said that Russian oil makes up a small fraction of Sinopec's international crude purchases and that it will make "dynamic adjustment" in future buying based on the global market situation.
Chinese refiners have benefited from cheap crude oil supplies from Iran, Venezuela and Russia as Western sanctions have forced those producers to sell oil at deep discounts to keep revenue flowing. Although Chinese state majors have shied away from Iranian and Venezuelan oil, Sinopec has been taking in Russian supplies, traders have said.
We remind, Sinopec reported a 10.5% year-on-year increase in first-half 2022 net profit on the back of strong crude, even as its chemical earnings shrunk 94% as demand collapsed amid COVID-19 curbs. Strong crude and COVID-19 outbreaks dampened domestic demand for oil products in April-June 2022, with chemical operations have had to grapple with high cost, high inventory, low utilisation rates and poor margin. Ethylene consumption in the first half barely grew, logging a 0.1% year-on-year increase, while output grew 5.9% to 6.85m tonnes. Sinopec is targeting to produce 7.2m tonnes of ethylene in the second half, which will bring the full-year production to 14.05m tonnes, up 4.9% from 2021.