Sinopec Engineering, tasked to deliver on Beijing’s Belt and Road Initiative, thinks it can win Bangladesh project

Eric Ng

Sinopec Engineering (Group), a key implementer of China’s Belt and Road Initiative, is confident it can win a bid to expand an oil refinery in Bangladesh, according to its president.

“In Bangladesh, we have made relatively concrete progress on a refinery expansion project,” president

Xiang Wenwu told reporters on Monday. “It is at the final tender negotiation stage and we have a relatively good chance of winning the bid.”

He would not provide details.

India’s The Financial Express newspaper reported in May that parent China Petrochemical (Sinopec Group) was eyeing to team up with French firm Technip to jointly build 3 million tonnes of annual crude oil processing capacity worth US$1.15 billion at the southeastern port of Chattogram.

It cited an unnamed senior official of state-owned fuel importer and distributor Bangladesh Petroleum.

The expansion would triple the South Asia nation’s annual refining capacity to 4.5 million tonnes from 1.5 million tonnes, and bring US$220 million of annual savings to the nation that imports 7.5 million tonnes of crude and refined petroleum a year, it added.

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The public relations representative for Sinopec Engineering – a construction engineering firm for oil refineries and petrochemicals projects – declined to comment on the report.

Xiang said South Asia, Southeast Asia and Africa are key markets where the company is targeting to expand its overseas revenue.

It has fallen to 10 billion yuan last year from just over 14 billion yuan in both 2016 and 2017, and has declined 4.9 per cent year-on-year to 5.9 billion yuan in this year’s first six half.

Newly signed overseas contracts in the first half also shrank 32.9 per cent year-on-year to 2.2 billion yuan, putting pressure on the company that has won major projects in Malaysia and the Middle East a few years ago, to win more projects.

In Egypt and Algeria of North Africa, the company is also going after some potential projects which are at early stages of development, Xiang said.

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The Belt and Road project is the brainchild of President Xi Jinping who initiated it in 2013, with the aim of fostering closer trade and investment ties with 71 nations in Asia, Europe, Africa and Latin America, initially through mostly China-funded infrastructure projects.

Chinese banks have provided some US$200 billion of loans to fund more than 2,700 BRI projects, according to its industrial policy setter, the National Development and Reform Commission.

Meanwhile, Sinopec Engineering has won a 826 million yuan contract to provide German chemicals giant’s United States unit prefabricated components for building pipelines in a modular way, for better quality control and higher efficiency.

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Asked if the business may be affected by the US-China trade war, Xiang said any impact would not be substantial given the cooperation with BASF involves multiple markets.

Having done similar projects in Artic Russia and Kuwait, Sinopec Engineering has production capacity and expertise advantages, he added.

The firm on Monday posted an 8.2 per cent net profit rise to 1.2 billion yuan for the year’s first-half.

Xiang said it is confident to reach its annual new contract signing target of 55 billion yuan, after clinching 33 billion yuan in deals in the first half.

It will maintain a high level outlay to develop lower-carbon emitting methods to turn crude oil, natural gas and coal into chemicals, besides hydrogen energy technology. Such spending surged 64.9 per cent to 747 million yuan in the first half.

An interim dividend of 10.8 fen per share was declared, up from 10 fen last year.

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