Sinopec firms up alliance with Exxon
By Alex Frew McMillan
HONG KONG, China (CNN) -- Sinopec Corp. has signed a framework agreement to strengthen its alliance with Exxon Mobil Corp.
The deal, signed at a ceremony in New York on Monday, advances the companies' joint venture projects in Fujian and Guangdong provinces, including a joint-owned refinery and petrochemical complex in Fujian.
The new plans call for a total investment of $3 billion, to expand capacity from 80,000 to 240,000 barrels per day and build and a new ethylene steam cracker processing unit.
The companies are also working toward a joint venture to market fuel to around 600 services stations in Fujian province, to market fuel from the refinery.
The agreement came one day ahead of a trip by Chinese President Jiang Zemin to the United States. Jiang will hold a summit with U.S. President George W. Bush at his Texas ranch.
Separately, China's No. 2 cell-phone company China Unicom announced supply deals worth $1.2 billion with four U.S. telecom companies.
Partners since 2000
Sinopec, China's second-largest oil company, formed a strategic alliance with Exxon Mobil in 2000. They are developing cooperative ventures in China's Fujian and Guangdong provinces.
Sinopec Chairman Li Yizhong said the agreement announced Monday "is another important milestone" in the companies' relationship.
"We will further strengthen and broaden our cooperative relationship and achieve the various objectives laid out in the agreement," Li said.
Exxon Mobile Chairman Lee Raymond said the framework agreement spells out the companies' commitment and sets specific goals for their projects.
Gas stations in Guangdong
In Guangdong, the companies are assessing a joint venture to expand a Sinopec refinery and other petrochemical facilities.
They are developing a joint venture to market fuel in Guangdong as well, and they expect to run around 500 service stations within three years of setting up the company.
Li said the name of the gas stations would reflect both the Sinopec and Exxon Mobil brands.
The Guangdong refinery will mainly serve the China market but there is some chance it will also export oil.
Sinopec stock is up 0.83 percent at HK$1.21 at noon on Tuesday, outdoing the Hang Seng's 0.23 percent rise.
Jiang is due on Tuesday to unveil a memorial at the George Bush Presidential Library honoring downed U.S. pilot Jimmy Fox.
Fox crashed and was lost in action on the Burma border while flying a China National Aviation Corp. freight plane during World War II.