Sinopec
and Shell form retail joint venture in Jiangsu
Posted: 11 May 2004
China Petroleum and Chemical Corporation (Sinopec Corp), Shell
China Holdings BV and Shell (China) Limited signed a joint venture
contract to develop a network of about 500 service stations in Jiangsu
Province, the People's Republic of China.
Chen Tonghai, President of the Sinopec Group and CEO of Sinopec
Corp, and Rob Routs, Group Managing Director of the Royal Dutch/Shell
Group of Companies and CEO of Oil Products and Chemicals, signed
the contract in London, in the presence of China's Minister of Commerce,
Bo Xilai, and Britain's Secretary of State for Trade and Industry,
Patricia Hewitt.
Sinopec Corp will hold 60 per cent equity in the joint venture,
with the Shell companies taking 40 per cent.
The joint venture, which involves an investment of about US $200
million, expects to have a network of about 500 service stations
operational within three years of the establishment of the joint
venture company.
Chen Tonghai said: "Coinciding with Premier Wen Jiabao's visit
to the United Kingdom, the signing of this contract between Sinopec
and Shell is a leading example of successful Sino-British economic
and trade cooperation, as well as another milestone in our cooperation
with Shell. Incorporating the strengths of both partners, the joint
venture will provide clean fuels and first-class services to consumers
in Jiangsu and fuel economic development."
Rob Routs said: "This project represents a major step-change
in Shell's retail presence in China. We are combining our international
experience and expertise of developing and managing retail networks
worldwide with Sinopec's extensive experience of running major networks
in China. We believe that this venture will be a tremendous success."
The agreement today is a major milestone for the project. The next
step is to obtain formal government approval of the contract and
a business licence, following which the joint venture can be established.
The 100,000 sq km coastal Jiangsu province north of Shanghai is
China's second richest with a population of 73.5 million.
For more information see www.shell.com
Posted by Richard Price,
Editor Pipeline Magazine
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