China Petroleum & Chemical Corporation (SNP - Free Report) , also known as Sinopec, recently commenced operations at the $6.2-billion new refinery and petrochemical plant located in Zhanjiang, in south China’s Guangdong province.
The refinery has a crude oil processing capacity of 200,000 barrel per day (bpd). The petrochemical unit incorporates an ethylene facility of 800,000 tons per year. Moreover, the complex has a crude oil terminal with 300,000 tons of capacity. This new complex is expected to create thousands of jobs and bring in 200 billion yuan of investment in the province. It is built around 60 kilometers from the company’s Maoming refinery.
The plant reportedly received its first crude oil cargo of 128,900 tons last month from Middle East through a very large crude carrier (VLCC). Also, the refinery started receiving gas from May-end through a 76-kilometer pipeline.
This new complex will meet the demand from both domestic and international markets. Demand for refined products is expected to increase once the coronavirus-induced lockdowns are lifted around the globe. As such, the terminal — which can accommodate VLCCs — is expected to increase competitiveness of the company’s products in the industry.
This new facility marks the third integrated complex to start operations in China in the past 18 months. The first two complexes have a total refining capacity of 800,000 bpd, built by Hengli Petrochemical and Zhejiang Petrochemical.
Sinopec has lost 31.5% in the past year compared with 37.6% decline of the industry it belongs to.
Zacks Rank and Stocks to Consider
Currently, Sinopec has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include Chaparral Energy, Inc. (CHAP - Free Report) , CNX Resources Corporation (CNX - Free Report) and Concho Resources Inc. (CXO - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chaparral Energy’s bottom line for 2020 is expected to rise 57.8% year over year.
CNX Resources beat earnings estimates thrice and met once in the last four quarters, with average positive surprise of 111.5%.
Concho Resources has a positive earnings surprise of 4.9% in the last four quarters.
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