Unipec sustains annual volume rise

Workers report for operations at Sinopec's drilling platform in Saudi Arabia. XINHUA

Unipec Singapore Pte Ltd, a trading unit of China Petroleum & Chemical Corp, or Sinopec, said it was confident that for the sixth year in a row, its oil and gas turnover will likely increase by 10 percent in 2017.

Yu Yongjun, deputy general manager of Unipec, attributed the volume uptrend to increasing cooperation with China's aerospace, shipping and heavy machinery companies with rapidly expanding overseas operations. "This year, growth will also come on the back of an expanded storage and logistics capability."

According to Sebastian Lewis, head of content, Greater China, S&P Global Platts, China is increasingly reliant on crude oil imports as domestic supply is unable to keep up with demand. So, it is unsurprising that Unipec has seen growth in turnover, and import volumes will rise in 2017 over last year.

"The growth is driven by rising demand for oil products like gasoline and jet fuel," said Lewis. "Although the rate of growth in China's oil demand will likely slow over the next few years as China's economy slows, demand for imported oil will continue to rise unless we see a very significant growth in technologies like electric motors and electric storage which might be able to replace the need to use oil, especially in the transport sector."

Unipec data show its refined oil sales volume exceeded 37 million metric tons in 2016, with sales revenue reaching $20 billion.

Most of the volumes are supplied to Sinopec refineries, including Yanbu Aramco Sinopec Refining Company in Saudi Arabia, which is partly owned by Sinopec.

The corporation has also recently bought Chevron Corp's South African assets and its subsidiary in Botswana-an attempt to secure the Chinese company's first major refinery in Africa, including a 100,000-barrels-per-day oil refinery in Cape Town, a lubricants plant in Durban and 820 petrol stations and other oil storage facilities.

Li Li, energy research director at ICIS China, a consulting company that provides analysis of China's energy market, said an increasing number of Chinese companies are expanding their business overseas.

Unlike in the past when China's go-global strategy was marked by the import-export business, Sinopec's expansion shows an international company with a global footprint, she said.

According to Yu, the company has become the biggest diesel supplier to Bangladesh and the biggest oil supplier to Indonesia and India after 10 years' development.

Southeast Asia has a shortage of refined oil products, which provides a great opportunity for Unipec as China is going through a glut in the sector, he said.