China's state-owned Sinopec on Monday established a new engineering company that will focus on refinery and petrochemical projects, as it aims to secure more construction work in the country and overseas.
Sinopec Engineering (Group) Co. was created from the consolidation of eight of its construction subsidiaries and can handle up to 20 engineering projects at any one time, with the total value of the projects estimated at Yuan 100 billion ($15.8 billion) a year, Sinopec said in a statement Monday.
The company will also be capable of constructing large-scale refining and ethylene projects.
These eight subsidiaries include Sinopec Engineering Inc., Sinopec Luoyang Engineering, Sinopec Ningbo Engineering, Sinopec Shanghai Engineering and Sinopec Nanjing Engineering. All have been involved in engineering, procurement and construction works for a range of projects including refineries, petrochemical complexes, chemical fiber plants, natural gas processing plants as well as pharmaceutical facilities.
Sinopec Engineering (Group) has a registered capital of Yuan 3.1 billion. Sinopec said the new entity would help strengthen the group's competitive edge in China as well as in its overseas forays and help bring Chinese engineering techniques abroad. Through its engineering projects Sinopec has a strong existing customer base in Kuwait, Saudi Arabia, Qatar, Kazakhstan, Nigeria, Singapore, Bangladesh and elsewhere.
Local media in January reported that Sinopec was planning a listing of its engineering unit in Hong Kong following the consolidation, to raise as much as HK$10 billion ($1.3 billion).
"This could be one of the units going for an initial public offering," said an analyst in Shenzhen on Tuesday. "The management had previously said they intended to list certain units of the group to realize more value for shareholders."
