Sinopec to buy US propane from Phillips 66
China's Sinopec and US-based Phillips 66 have signed a long-term contract for the purchase and sale of propane, the companies announced on Monday.
A signing ceremony was held at Sinopecs Beijing headquarters, with representatives from UNIPEC America (a Sinopec subsidiary) and Phillips 66. Dai Houliang, senior vice president of Sinopec, and Tim Taylor, executive vice president of Phillips 66, were present.
Propane, also known as liquefied petroleum gas (LPG), is one of the byproducts of producing crude oil, processing natural gas and refining petroleum. It is typically a gas that is compressed and liquefied for easy transportation. LPG can be used as a basic chemical feedstock and fuel.
In recent years, there has been a substantial increase in propane supply
due to the rapid development of shale gas in the US. Because of this the price
of propane is more competitive in the US than in other markets
. Propane produced from gas fractionation is of higher purity than that produced from refining, and is a better chemical feedstock.
This is a mutually beneficial cooperation for Sinopec and Phillips 66," said Houliang.
"We are able to explore more business and cooperation opportunities by signing this contract, and it has further diversified the chemical feedstock supply
channels for Sinopec, which will be critical to adjust our chemical feedstock structure."
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