China Petroleum and Chemical Corporation (Sinopec) and British Petroleum (BP) announced the launch of a joint venture of a gasoline company in east China's Zhejiang Province in Beijing.

The joint venture is expected to build and operate 500 gas stations in three years in Hangzhou, Ningbo and Shaoxing in Zhejiang, one of the most economically dynamic areas in China.

According to the agreement, Sinopec will be the exclusive supplier of oil products for the joint venture, which has a tenure of 30 years and registered capital of 800 million yuan (US$96.38 million) with 60 percent from Sinopec and 40 percent from BP. The joint venture will use the brand names of both companies.

Foreign oil giants are trying to increase their share in China' s retail oil market, which will open to foreign companies this December in keeping with China's commitment to the World Trade Organization.

So far, the Chinese government has given the green light for three such joint ventures. Besides BP, the other two partners are Royal Dutch/Shell and Total Oil.

Lord John Browne, CEO of BP, said the new venture marks a new step forward for the long-term cooperation between the two companies.

Sinopec President Wang Jiming said the company would try to improve management and expand retail networks to cope with increasing competition in the oil retail market.

At the end of September, Sinopec had 31,030 gasoline stations operating under its brand.

(Xinhua News Agency November 6, 2004)