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March 28, 2022

Sinopec suspends natural gas marketing venture in Russia

China’s Sinopec has also halted a major investment in a gas chemical plant in Russia.

Chinese state-run oil and gas enterprise Sinopec has reportedly paused talks regarding a gas marketing venture in Russia.

According to a Reuters report, the Chinese firm has suspended talks on a venture involving marketing Russian gas in China. The company has also halted a major investment in a gas chemical plant, the news agency added, quoting unnamed sources.

The move comes as mounting sanctions on Russia forced several companies to review their operations in the country. Major companies such as Shell, BP, and Equinor have already announced their plans to exit Russian operations.

China is one of the largest importers of Russian oil and gas.

One of the sources told Reuters that the officials of three state energy firms, Sinopec, China National Petroleum Corp (CNPC), and China National Offshore Oil Corp (CNOOC), were recently ordered by China’s Ministry of Foreign Affairs to reassess their activities in Russia.

The companies were also advised to re-evaluate potential acquisitions of Russian assets.

The three businesses are working to assess the impact of Western-led sanctions on Russia on their investments.

Sinopec did not comment on the report.

Sinopec President Yu Baocai told investors and reporters that the company’s business in Russia is running smoothly. He added that there is no immediate risk of asset impairment in the country.

In 2021, the company reported a 114% year-over-year increase in net profit, capitalising on recovering energy demand and oil price rises.

The net profit attributable to shareholders of the parent company was CNY71.21bn ($11.18bn), in 2021.

This year, Sinopec plans to invest CNY198bn ($31.1bn).

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