Sinopec May Open a Greenfield Refinery Complex in South China
China Petroleum & Chemical Corporation SNP, also known as Sinopec, is planning to open a new refinery and petrochemical complex in the June quarter of 2020, according to Reuters. The $5.7-billion complex in SouthChina will reportedly be getting crude as a feedstock from Kuwait.
Notably, the unit is the third greenfield refinery and petrochemical complex that is being constructed in China in just a two-year span. The plant is expected to have a refining capacity of 200,000 barrels per day (Bbl/D).
Investors should know that the project will have a hydrocracker, a residue fluid catalytic cracker, a diesel hydrotreater and a reformer. This will enable the refining complex to produce low sulphur fuel. A naphtha cracker, with a capacity of 800,000 ton-per-year, and some petrochemical plants will be integrated with the refining complex, per the source.
Since the refinery and petrochemical unit will be producing low sulphur fuel, the Zhanjiang complex will have an edge over other units as the global marine fuel emission rules set by the International Maritime Organization (IMO) are going to be more stringent starting next year.
With regards to feedstock, Sinopec is reportedly in a plan to secure crude supply agreement with Kuwait Petroleum Company. With this, the crude sales to China from Kuwait will jump to a record mark of roughly 600,000 Bbl/D in 2020, the source revealed.
Separately, Sinopec announced the inauguration of two hydrogen stations in Shanghai. In collaboration with French company Air Liquide, the integrated energy player opened up the stations to make Shanghai a hydrogen energy harbour.
Headquartered in Beijing, Sinopec currently carries a Zacks Rank #4 (Sell). A few better-ranked players in the energy space are Murphy USA Inc MUSA, CNX Resources Corporation CNX and Contango Oil & Gas Company MCF. While Murphy USA sports a Zacks Rank #1 (Strong Buy), CNX Resources and Contango Oil & Gas carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA beat the Zacks Consensus Estimate in three of the prior four quarters.
CNX Resources surpassed the Zacks Consensus Estimate in two of the prior four quarters, the average positive earnings surprise being 34.8%.
Contango Oil & Gas is likely to see bottom-line growth of 87% in 2019.
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