New | Sinopec sees natural gas projects boost order book amid oil slump
First half net profit down 8.9pc on weaker demand for oil refining and chemical plants
Sinopec Engineering (Group), the energy and chemical plant construction arm of oil and gas giant China Petrochemical - the parent of listed Sinopec - saw its order book grow by 9 per cent as natural gas projects more than offset falling oil refining and chemical demand amid industry over-capacity.
The firm obtained 27.85 billion yuan (HK$33.7 billion) of new contracts in the first six months, up from 25.45 billion yuan in the year-earlier period. It is targeting 40 billion yuan of new orders for the full year and expects to shortly sign a US$1.7 billion contract for a new refinery and chemical complex in Kuwait.
Of the 27.85 billion yuan of contracts, orders from crude oil refining and petrochemical projects tumbled by a third year on year to 7 billion yuan while those from coal-based chemical plants dropped 43 per cent to 4.59 billion yuan.
These were more than compensated by a 133 per cent jump in orders from other industries to 16.3 billion yuan, of which 10.3 billion yuan was from Sinopec's terminals in Tianjin and Beihai, Guangxi Zhuang autonomous region, to import and re-gasify liquefied natural gas (LNG).
President Yan Shaochun said a plant to liquefy Sinopec's gas output from shale rock formations in Chongqing, as well as other LNG import terminals Sinopec planned to build in Wenzhou, Zhejiang province, and Lianyungang in Jiangsu, will provide potential orders although they are subject to open bidding.
Opportunities from natural gas storage and transportation are also being studied by the firm, since Beijing wants more such infrastructure to realise its gas consumption target to tackle the nation's chronic air pollution.
