Sinopec plans $2.9 bln investment to upgrade plants
CHENGDU, April 24 (Reuters) - Sinopec (0386.HK) will invest 20 billion yuan ($2.9 billion) to upgrade its plants before 2010 to ensure its refined oil products meet new national standards, a company official said, paving the way for equipment suppliers to compete for orders from Asia's top refiner.
Chinese refiners have difficulty adapting to higher fuel standards because they process more and more high-sulphur and heavy crude oil, Sun Yongsheng, deputy chief engineer of Sinopec's Economic and Technology Research Institute, said in prepared remarks for the China Oil Traders' Conference.
In the meantime, they have comparatively low hydrocracking and de-sulphurising capacity, he said, adding that upgrading refining facilities and increasing hydrocracking capacity would add to refiners' financial burden and increase their demand for higher fuel prices, he said.
From the start of this year, Sinopec (600028.SS)(SNP.N) had begun to supply the Chinese capital with fuels that meet Euro IV standards from its Beijing plant, part of efforts by China to try to clean up the city's smoggy skies ahead of the summer Olympics.
Beijing adopted Euro III standard fuel at the end of 2005 while the rest of the country was required to meet the requirements from the beginning of 2010.
($1=6.980 Yuan)
(Reporting by Jim Bai; Editing by Anne Marie Roantree)
