August 22, 2008

Sinopec Corp to acquire equity in refineries and gas stations

China Petroleum & Chemical Corporation has announced that it would acquire equity interests of 3 oil refineries and 63 gas stations from its parent company Sinopec Group Company. Sinopec Yangzi Petrochemical, a subsidiary wholly owned by Sinopec Corporation, will also acquire equity interests of 2 oil refineries from Sinopec Group.

Under an agreement signed between Sinopec Corporation and Sinopec Group, Sinopec Corp will acquire from Sinopec Group the 100% equity interest in Sinopec Hangzhou Oil Refinery Plant, as well as the 59.47% equity in Yangzhou Petrochemical Plant and a 75% interest under the JV contract of Zhanjiang Dongxing Petrochemical Company Limited.

Sinopec Corporation will also acquire the operating rights of 63 gas stations from Sinopec Sales and Industrial Company, a wholly owned subsidiary of Sinopec Group. Sinopec Yangzi Petrochemical entered into two equity transfer agreements with Sinopec Group to acquire Sinopec Group's 100% equity interest in Taizhou Petrochemical and 100% shareholding in Qingjiang Petrochemical. The acquisitions are valued at CNY 3.66 billion, to be paid for by the internal resources of Sinopec Corp and Sinopec Yangzi Petrochemical.

Sinopec Corporation said that the acquisition of the gas station operating rights was expected to rationalize Sinopec's marketing of its petroleum products, facilitate the expansion of its refined oil retail network and enhance its refined oil sales capability. The 5 refineries have a total annual capacity of 8 million tonnes. The proposed transactions require approval of the state owned assets supervision and administration commission and other relevant authorities.