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Sinochem Signs Deal with Taiwan Oil Firm
The China National Chemicals Import and Export Corp (Sinochem) has signed its first formal oil-trade deal with a Taiwanese refiner to formalize the existing oil trade between the two sides from next year.

The deal was signed last week with the Formosa Plastics Corp, a private refiner and petrochemicals giant in Taiwan Province, during a visit to the island by a Sinochem delegation led by company President Liu Deshu, Sinochem official Zhao Xiaochun told China Daily on Friday.

"The pact will bring the two companies a steady and long-term trading relationship," said Zhao.

The two companies used to be random spot-trading partners, trading mainly in crude oil.

Sinochem had a trading volume of 4 million tons with Taiwan refiners during the first nine months of this year, with Formosa accounting for the majority and the Taiwan authorities-run China Petroleum Corp a minority.

"Under the deal, we will increase our trading volume and expand our business with Formosa from crude oil to refined oil products and petrochemicals," said Zhao.

However, Zhao said he did not have more details about the new pact since he could not directly contact his colleagues on the delegation still in Taiwan.

More details should be available when the delegation returns to Beijing this week.

An earlier Reuters news agency report said that, under the new pact, Sinochem plans to start processing crude oil at Formosa's refineries next year and further develop the two companies' trade in crude and refined oil products and petrochemicals.

Reuters also said that Sinochem will purchase more from Formosa, reselling refined oil products such as diesel for power generation in the vast mainland market, the world's fastest-growing energy market.

(China Daily December 23, 2002)

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