On October 9, 2004, Sinochem and TOTAL signed the equity joint venture agreement on the establishment of TOTAL-Sinochem (China) Fuels Company Ltd. Both parties will invest about 900 million RMB to develop a retail network composed of about 200 service stations in Beijing, Tianjin, Hebei and Liaoning within 7 years and plan to sell no less than 1 million cubic meters (800,000 tons) of oil products by the year 2012.
Sinochem holds 51% of shares in the joint venture and TOTAL holds the other 49%.
Sinochem and TOTAL have more than ten years of close cooperative relations in WEPEC which at present has developed into a large refinery with a crude refinery capacity of 10 million tons/year, advanced management level, strong profitability and efficiency. The development of oil products retail network in North China complies with the growth strategies and common interests of both parties.
As one of the four major state-owned oil companies in China, Sinochem has had more than 50 years of oil transaction, with business content covering the exploration and development of oil and natural gas, domestic and international trade of oil and oil products, investment in industrial projects of refineries, warehousing and logistics. It has established a relatively complete oil industrial chain and plays an important role in China’s energy resources security and economic development. The building of retail network in North China is a major step in the oil development strategy of Sinochem, aiming at contributing to the standardization of Chinese oil products circulation system and oil products market and benefiting various stakeholders including the country, society, consumers and enterprises.
TOTAL hopes to coordinate the future refinery projects and retail network projects by developing the retail network in North China. In addition to investment in WEPEC, TOTAL has participated in other downstream projects in China, such as the service stations in central China, 2 lubricant manufacturers with Elf and TOTAL brands, 10 LNG storage tanks and special liquid, petrochemicals and chemicals projects.