Sinopec contracts Brazilian natural gas pipeline project

　　Sinopec recently contracted the northern section of Brazil's national natural gas backbone network project. This will be the second natural gas pipeline network project undertaken by Sinopec, and it also indicates that Sinopec has obtained the largest overseas petroleum engineering service project to date.

　　Sinopec undertook the Brazilian national natural gas backbone network project, indicating that it has begun to penetrate the overseas natural gas service market. In 2006, Sinopec won 6 international refinery engineering service projects with a contract value of US$3.08 billion.

　　PetroChina (hereinafter referred to as “Sinopec”) recently contracted the northern section of the Brazilian National Natural Gas Backbone Project. This will be the second natural gas pipeline network project undertaken by Sinopec, and it also marks the Sinopec has obtained the largest overseas petroleum engineering service project to date. The natural gas backbone pipeline project that Sinopec and Brazil National Petroleum Corporation cooperated with was part of the cooperation agreement signed by China and Pakistan in June 2006 to strengthen infrastructure construction. The project includes GASCAV (hereinafter referred to as “South Section Project”) project and GASCAC (hereinafter referred to as “Northern Section Project”). Among them, the southern section project is the first EPC project Sinopec has undertaken in Brazil (from the design, equipment procurement, construction and subsequent operations are all responsible for a company, namely the total package project), a total length of 303 kilometers, by the end of December 2007 Completed across the board, the project is the only major project of the Brazilian National Oil Company in recent years to be completed basically according to the schedule. The northern section project contract covers the Sinopec EPC project contract and the China Development Bank project financing contract. The length of the pipeline is 974 kilometers.

　　As early as 2005, it was reported that Sinopec will participate in the natural gas pipeline project linking northeast and southeastern Brazil. At that time, some media said that the total cost of this part of the project undertaken by Sinopec was about US$6.5 billion, and it is expected to be completed in five years. An insider of Sinopec told the First Financial Daily that the project is of great significance and Sinopec’s large overseas oil projects were scattered.

　　The industry sources told reporters that this project shows that Sinopec has begun to penetrate the overseas natural gas service market. In 2006, Sinopec had won six international refining and chemical engineering service projects with a contract value of US$3.08 billion. Among them, the transformation and upgrading project of Iran's Arak refinery, with a total contract value of 2.168 billion euros, is China's largest overseas refinery engineering service project to date. However, Sinopec did not disclose whether the contract amount of the petroleum engineering service project exceeded the above-mentioned refining and chemical engineering service projects.

　　However, Sinopec will also encounter some difficulties in participating in this project. At present, the international steel and service supply prices are soaring. Informed sources said that the two sides have conducted a series of discussions on prices, but Petrobras apparently felt that Sinopec’s superiority in natural gas pipeline business in comparison with many partners. And sincere cooperation. Sinopec is currently building Puguang Gas Field and its pipeline network, which will accumulate more experience for its overseas market expansion.