China's top oil refiner, Sinopec Corp, has formalised a marine fuel venture with the country's second largest shipper, China Shipping (Group) Co, officials said on Wednesday.
The 50-50 venture, in which Sinopec would give China Shipping priority to buy its marine bunker fuel and use its coastal oil storage facilities in return for favourable shipping terms, had a registered capital of 876.66 million yuan ($105.92 million), they said.
Giant refiner Sinopec imported more than half of the 105 million tonnes of crude oil it refined last year, while China Shipping has 341 vessels with an aggregate deadweight of 8.89 million tonnes.
The alliance comes days after a similar venture called China Marine Bunker (PetroChina) Co Ltd between China's top oil producer, PetroChina, and the country's biggest shipper, COSCO, was inked last Friday, they said.
Both ventures said they had advantages over the other and were confident about their future.
China Marine has years of experience in the bunker fuel business and is so far the only company allowed to offer tariff-free bunker fuel for international shippers, company officials told Reuters.
The China Shipping official said their joint venture would concentrate on marine fuel operations along China's coastal regions and inland waterways versus COSCO's largely international clientele.
The marine bunker market in China, catering to both domestic and international shippers, totals 11-12 million tonnes a year.
Marine fuels, comprising mostly fuel oil and heavy gas oil, account for about one tenth of China's annual fuel oil consumption of about 40 million tonnes.
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