Sinopec engineering arm taps Asia petrochemicals growth as new contracts double

SINOPEC Engineering Co

21/08/2017 10:15

* New H1 new contracts total 17.8 bln yuan ($2.67 bln) 
    * New petchem H1 deals almost 10 bln yuan vs 2.4 bln yr-ago 
    * Silver lining for oil svcs firms seen amid weak oil prices 
 
    BEIJING, Aug 21 (Reuters) - Sinopec Engineering  2386.HK , 
part of China's top oil refiner, won 17.8 billion yuan ($2.67 
billion) of new contracts in the first half, as strong demand 
from the Asian petrochemicals industry takes the sting out of 
slower oil sector business. 
    The Hong Kong-listed arm of Sinopec said on Monday the value 
of the new deals was more than double the total in the same 
period last year. The orders number helped lift Sinopec 
Engineering shares 5 percent, even as it reported a drop in 
first-half profit and revenue.  urn:newsml:reuters.com:*:nFWN1L40R8 
    The data suggests burgeoning investment in petchem capacity 
in Asia is offering respite to the oil services sector from a 
prolonged slowdown triggered by long-running weakness in crude 
oil prices. 
    Sinopec Engineering builds plants and installs equipment 
across the refining, petchems, coal and chemicals sectors. Over 
half of the new contracts it reported on Monday - almost 10 
billion yuan - were in the petrochemical sector, up from 2.4 
billion yuan in first-half 2016. 
    The value far exceeds that from oil refining, which 
accounted for 40 percent of the company's first-half revenue. 
    Refiners among Sinopec Engineering customers are seeking to 
boost output of high-value petchem products to meet demand for 
goods ranging from plastics to paints and adhesives. 
 urn:newsml:reuters.com:*:nL4N1DG248 
    The value of new overseas contracts shot up to 1.2 billion 
yuan from 258,000 yuan a year ago, the company said. 
    "With domestic oil refining investment shrinking, Sinopec 
has made a big push to go aboard," Harry Liu, director of oil 
markets with IHS Markit said.  
    In March, Sinopec bought its first major refinery in Africa 
from Chevron.  urn:newsml:reuters.com:*:nL3N1GZ3PH 
    Meanwhile new contracts from non-Sinopec businesses more 
than tripled to 11.3 billion from the same period last year. 
     
    Progress of major projects:     
 Name of the project        Progress 
 Dongjiakou Crude Oil       By June, about 30 pct of  
 Commercial Reserve         construction complete; 
                            on-site work started 
 Tianjin LNG project        Project almost complete  
 Kuwait Oil refinery        As of June, 40 pct complete 
 Malaysia RAPID Refinery    As of June, 80 pct complete 
 FCC Project of Kazakhstan  At end June, the design work  
 Atyrau Refinery            complete; about 90 pct 
                            of the overall progress complete 
  
($1 = 6.6701 Chinese yuan renminbi) 
 
 (Reporting by Meng Meng and Josephine Mason; Editing by Gavin 
Maguire and Kenneth Maxwell) 
 ((meng.meng@thomsonreuters.com; +86-10-66271220 ; Reuters 
Messaging: meng.meng.thomsonreuters@reuters.net)) 
 
Keywords: CHINA SINOPEC/ENGINEERING