Sinopec receives subsidy to cover refining losses

China Petrochemical Corp. (Sinopec Group) subsidiary Shanghai Petrochemical Co. Ltd. will receive a state subsidy of RMB2.3 billion (US$336.95 million) for refining losses in 2008, which the company said covers less than 50% of its total refining losses. Meanwhile, parent company China Petroleum and Chemical Corp. (Sinopec) said it would export more diesel oil and expand gasoline output to try to recoup losses incurred from local sales. It would also increase its 2009 output of jet fuel to China Aviation Oil Holding Co. (CAOHC) by 13.4%, in line with an agreement it signed with China National Petroleum Corp. (PetroChina) and China National Aviation Fuel Group Corp. (CNFA), the parent of CAOHC. Sinopec has chosen to brave market fluctuations, even pushing forward with the September 2009 opening of its one million metric ton per year (mtpy) steam cracker in Tinanjin, China, which is expected to provide ethylene to a joint venture with Saudi Basic Industries Corp. (SABIC). (February 17/ March 4/10, 2009)