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Sinopec to Spend $29 Billion on Upgrade of Refinery Units

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In a bid to produce high quality fuel, Sinopec group – the parent of China Petroleum & Chemical Corporation – has decided to spend as much as $29 billion to upgrade four refining bases through 2020.   

Following the upgrade, the total refining capacity of the four refining units are expected to reach a rate of 130 million tons every year. Moreover, the company anticipates ethylene production at a rate of 9 million tons per year. Most importantly, the refining sites are likely to capture 45% refining capacity and 65% ethylene capacity after the remodeling.

In fact, the four units are estimated to start contributing revenues of 800 billion yuan by 2020, if oil trades around $54 per barrel. The development in this front is in sync with the growing demand for high quality refined products.  

China Petroleum and Chemical Corporation, which is headquartered in Beijing, China, is one of the largest petroleum and petrochemical companies in Asia. The company is the second-largest crude oil and natural gas producer as well as the largest refiner and marketer of refined petroleum products in China.

In the last three months, the company’s shares outperformed the Zacks categorized Emerging Markets Integrated industry. During the aforesaid period, China Petroleum & Chemical Corporation gained 7.7% compared with 3.6% increase for the broader industry.

The company currently carries a Zacks Rank #2 (Buy). Other well-ranked players in the energy sector include Ultra Petroleum Corp. , Cheniere Energy Inc. (LNG - Free Report) and W&T Offshore Inc. (WTI - Free Report) . While Ultra Petroleum sports a Zacks Rank #1 (Strong Buy), both Cheniere Energy and W&T Offshore carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ultra Petroleum is expected to report revenue growth of almost 56% in 2017.

In 2017, Cheniere Energy is likely to report year-over-year growth of almost 287.5% and 76.9% in revenues and earnings, respectively. 

W&T Offshore reported a positive earnings surprise in each of the last four quarters with an average beat of 31.49%.

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