Chinese energy giants ink deals worth $66B
THREE major Chinese oil companies have signed contracts worth at least $66 billion with global energy giants during the 5th China International Import Expo (CIIE) in Shanghai, according to information obtained by state-run tabloid Global Times and from other media reports.
China National Petroleum Corp. (CNPC), China Petroleum and Chemical Corp. (Sinopec) and China National Offshore Oil Corp. (CNOOC) signed purchasing deals worth more than 480.9 billion yuan ($66.53 billion), news portal jiemian.com reported.
According to a report sent to the Global Times, the CNOOC signed import agreements with 18 global suppliers at the CIIE, with their value reaching a new high. Although the firm didn’t disclose the exact value, it said during last year’s CIIE that the value of the deals signed in the last four editions of the expo exceeded $40 billion.
CNPC signed 30 contracts — valued at about $16.8 billion — with 30 global companies to buy products that include crude oil, rubber and oil pipes, according to jiemian.com.
Sinopec has signed about $40 billion in contracts with 34 global firms to purchase products in 26 categories, including oil and chemicals.
The three oil giants signed contracts worth about $97 billion at the fourth CIIE, with Sinopec’s contracts worth $41.5 billion and CNPC’s at about $15.5 billion.
Other domestic energy companies also signed deals. China Energy Investment Corp. signed contracts worth about $2.5 billion with 40 companies from 18 countries and regions, up 38 percent from the previous CIIE.
It bought coal, high-end equipment and other goods from supplies in such countries as Russia, Germany and the United States.
Subsidiaries of State Power Investment Corp. signed contracts worth about $458 million with 13 international companies to purchase fuel components and technical equipment, among other items. It signed contracts worth about $250 million to import coal to help guarantee supplies for this winter and next spring.
China is ramping up coal imports to ensure energy supply while pushing for a transition to green and sustainable energy. In both cases, the deals offer a lot of business opportunities for international giants.
Companies see abundant opportunities in China’s drive to achieve carbon neutrality, which will mean a lot of demand for related products and services.
“China’s progress in clean energy has been very fast from technological reserves to resource layout under the carbon policies. We also believe what industrial forecasts say: that China’s green hydrogen market will account for about half of the world’s total by 2030. With such a large market, we, of course, will participate actively,” Harold Tian, head of technology, innovation and sustainability for China at German-based thyssenkrupp China, told the Global Times.
He also said China’s large market would nurture the most advanced technologies, and his company wanted to push technological development by entering the Chinese market.
Will Li, president of Linde Greater China, identified several sectors where opportunities abound as a result of China’s low-carbon pursuit. He cited as an example the rapid development of new-energy vehicles has a great influence on the lithium-battery and new-materials industries, which, he said, were important engines for his company’s growth in the country.
Li told the Global Times that China was researching technologies like chips, which fitted well with some of the company’s products and services, like specialty gases. This will be one of the firm’s strong growth points, as it could contribute to the country’s electronics industry’s development in the next five to 20 years.
Yin Zheng, executive vice president of Schneider Electric and president of Schneider Electric China, also told the Global Times that China’s industrial sector faced a dual transformation of decarbonization and digitalization, which yielded huge market potential and new momentum for development.
Experts said China’s energy trade had demonstrated the features of “dynamic balance” with both strong supply (exports) and demand (imports).
“The situation of China relying on imports for strategic energy and balanced new-energy imports and exports is expected to last for a relatively long period, as the global energy security situation is still unclear,” Chen Jia, an independent research fellow on international strategy, told the Global Times.
If global energy security risks intensify, China’s import volume of global strategic energy might surge further, including fossil energy and new-energy materials like rare earths and lithium, Chen said.