Sinopec preparing to build lubricant plant in Singapore foray
China Petroleum & Chemical (Sinopec), Asia's largest oil refiner, is 'actively preparing' to build a lubricant plant in Singapore in what is expected to be its first overseas foray in the downstream petrochemical sector.
The company is also studying investment opportunities in Singapore and other nations in oil refining and petrochemical production as part of its overseas expansion strategy, chief financial officer Wang Xinhua said.
He did not give additional details about the scale and investment of the plant. A spokesman said the company aimed to sell to the Asia-Pacific market rather than just China.
Sinopec began contract manufacturing of vehicle and marine lubricants with two Singapore firms, Italsing and AP Oil in 2007, according to Singapore's Business Times newspaper. It quoted Sinopec Lubricant vice-chief engineer Liu Qinghua as saying setting up a plant was one option to 'move on from contract manufacturing'.
Sinopec is studying building a large-scale refining and chemical base in Singapore's Jurong Island petrochemical industrial park, China Business News quoted an unnamed Singapore Economic Development Board official as saying.
The Sinopec spokesman said the lubricant plant was not aimed at circumventing the mainland's fuel price controls, as lubricant prices are not subject to state intervention.
However, if Sinopec decides to venture into refining in Singapore, it would achieve this purpose. Rival PetroChina last year bought leading refiner Singapore Petroleum.
Sinopec yesterday posted a 40 per cent year-on-year rise in first-quarter net profit to 15.79 billion yuan (HK$17.9 billion) on the back of strong gains in profits from oil and gas production, fuel marketing and petrochemical production.
Refining operating profit plunged 80.5 per cent to 1.46 billion yuan, as Beijing delayed raising retail fuel prices and lifted them by less than the increase in crude oil prices.
This compressed the refining profit margin to US$4.40 a barrel from US$8.20 a barrel in the year-earlier quarter, estimated Mirae Asset Securities head of regional energy research Gordon Kwan.
