DOHA: In a major private sector deal, Qatar’s Suhaim Bin Hamad Enterprises Group and Qatra Investment and Development Group (QID) announced a $5bn worth agreement to acquire 49 percent of China’s petrochemical giant Shandong Dongming Petrochemical Group.
With an estimated total asset of QR15bn (RMB26bn), Dongming Petrochemical is China’s largest independent refiner.
Announcing the plans, QID Chief Executive Ibrahim El Tenay said the deal is expected to be finalised by the fourth quarter of this year. The transaction, if completed, will include various new projects and expansion of current projects., the most important being the launch of an LNG storage facility with a capacity of 3 million metric tonnes.
The partners agreed to construct 1,000 mixed oil, non-oil and LNG/CNG stations within a 300-km radius of Dongming’s Heze refinery. This 300-km radius includes regions from 6 provinces. Most of the covered area is under-developed, meaning high growth potential, compared to more mature costal markets where retail is relatively saturated and competition is high.
Dongming’s Heze is the only major refinery in the radius, giving the project a unique product supply cost advantage, offering the opportunity to procure competitively-priced fuels, said Li Xiangping, Chairman, Shandong Dongming Petrochemical Group.
“The project presents the opportunity for Shandong Dongming Petrochemical to develop retail operations to consume their own products. 1,000 retail stations can consume on third of the Dongming refinery’s output. This strategy promotes natural gas-based fuels. As the government in China is placing greater value on gas and promotes competition and private investment, this will largely benefit the project and the firms.”
Parties agreed to build LNG and LPG port and storage facilities in China coast such as Shandong or Jiangsu province.
Based in Zhuangzi, Shandong Dongming Petrochemical Group is a large-scale petrochemical enterprise group integrating crude oil processing, petrochemical industry, fine chemical industry, chlor-alkali industry, coal chemical industry, thermoelectricity, logistic transportation, construction and installation, import and export trade, real estate development and sales terminal of refined oil product.
