China’s Sinopec may bag BP Zhuhai LPG asset - sources

19 July 2010 09:49  [Source: ICIS news]

GUANGZHOU (ICIS news)--Chinese oil major Sinopec looks set to win the bidding for BP’s 200,000-tonne liquefied petroleum gas (LPG) storage tank at Zhuhai in Guangdong province, sources familiar with the deal said on Monday.

BP set the floor price for the underground refrigerated tank owned by its subsidiary BP Zhuhai LPG Co at $100m (€77m) when it was put on sale in March.

“There’s no decision yet, but Sinopec has the biggest chance to acquire it,” said a source from BP Zhuhai LPG, who declined to provide further details.

“Among all four bidders, Sinopec Hong Kong Co offered the highest price and is very likely to be the final winner,” said a market source.

BP Zhuhai, one of China’s biggest LPG importers, had shipped around 430,000 tonnes of LPG cargo into the country last year, according to data from Chinese energy market intelligence service C1 Energy.

Chinese oil firms may further consider buying BP’s other quality assets on offer as the UK energy giant attempts to raise funds to cover its mounting liabilities in the ongoing oil spill clean-up operations in the Gulf of Mexico, analysts said.

“Chinese majors – primarily Sinopec, PetroChina and CNOOC – that are keen to tap into the international market, would actively discuss [the possibility of acquisitions] with BP,” said Zhang Junfeng, an analyst at Shenzhen-based China Merchants Securities.

Upstream oil fields would be the most attractive assets for them given that China continued to rely heavily on imported crude, he said.

“Quality upstream assets would add to their competitiveness against global behemoths, such as ExxonMobil and Shell,” Zhang added.

($1 = €0.77)

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By: Fanny Zhang
+65 6780 4359



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