China's five leading petrochemical companies posted combined profits of 27.1 billion yuan last month, an increase of 44.8 percent year-on-year, according to the China Petroleum and Chemical Industry Association (CPCIA).
The five companies are China National Petroleum Corp, China Petrochemical Corp, China National Offshore Oil Corp, Sinochem Corp, and Shaanxi Yanchang Petroleum (Group) Co.
In April, revenue for the five companies' main business was 207.7 billion yuan, a decrease of 28 percent year-on-year, said the association.
"Although the industry has seen some recovery compared with previous months, the demand is still weak and overcapacity still exists in the sector," the CPCIA said in a statement.
|
Vehicles being filled at a Sinopec gas station in Yichang, Hubei province.
|
The April turnover of China's petrochemical industry was 502.9 billion yuan, down by 8.4 percent year-on-year, said the association. However, it saw 1 percent growth when compared with March.
Domestic oil refining enterprises continue to see good performance in face of the relatively low crude prices. China Petrochemical Corp, the country's largest refiner, saw 48.4 percent growth in profit from a month earlier, according to the CPCIA.
Su Shulin, chairman of China Petrochemical Corp's listed arm Sinopec Corp, said on Friday that the company would lose money turning oil into fuel should crude trade above $60 a barrel and the government prevents it from increasing prices.
Sinopec will be under relatively big pressure if the government doesn't raise prices, Su told reporters after the company's annual general meeting in Beijing.
Global crude prices have risen by over 30 percent to around $60 a barrel currently. China may adjust fuel prices when crude oil costs change more than 4 percent over 22 working days under a pricing formula introduced last December.
LNG deal
Sinopec is also in talks to buy liquefied natural gas (LNG) from Exxon Mobil Corp's project in Papua New Guinea, Wang Tianpu, president of the company said on Friday.
The company plans to buy 2 million tons of the fuel a year from the project, he said.
The company has yet to sign a final agreement with Exxon Mobile and the accord will require government approval, said Wang.
China is building more than 10 LNG terminals on its eastern coast to meet a target of doubling the use of the clean fuel. China National Offshore Oil Corp earlier signed an agreement with British natural gas producer BG Group to buy gas from the latter's LNG project in Australia.
The agreement calls for CNOOC to purchase 3.6 million tons per annum of LNG for a period of 20 years from the Queensland Curtis LNG project in Australia, which is being developed by the BG Group. The project will come on line in 2014 with 7.4 million tons per annum in total capacity, CNOOC said in a statement.
China has set a target of raising the proportion of natural gas in its total energy consumption to 5.3 percent in 2010 from 2.8 percent in 2005, amid efforts to curb pollution.
The country's natural gas production will reach 120 billion cu m in 2011, under a three-year plan chalked out by the National Energy Administration.
