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Sinopec (SNP) Begins Operations at China Gas Storage Facility

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China Petroleum & Chemical Corporation SNP, also known as Sinopec, completed its first natural gas injection at its Wei 11 gas storage facility, located in the Zhongyuan oilfield region of China.

This marks the commencement of normal operations at the Wei 11 facility, which is the largest underground natural gas storage cluster in northern China.

The facility has a storage capacity of 10.03 billion cubic meters (bcm). It has a daily peak shaving capacity of five million cubic meters, which is sufficient to meet the daily gas requirements for 10 million households.

The Zhongyuan natural gas storage cluster currently involves three blocks, namely Wen 23, Wen 96, and Wei 11. Wei 11, which is situated at the junction of the Henan and Shandong areas, is designed to hold 1.009 bcm of gas. The company expects the facility to provide reliable gas supply in the northern part of the country and the Yellow River basin.

Sinopec also plans to commission its Wen 13 West and Bai 9 gas storage facilities within the Zhongyuan oilfield region by the end of 2021. The facilities will add an estimated capacity of 1.116 bcm, thereby, boosting the company’s gas storage and peak shaving capacities.

Once completed, the facilities will be connected to several natural gas lines operated by Sinopec. These include the Yulin-Jinan and Ordos-Changzhou lines, which connect gas fields in north China's Ordos basinwith consumers in the eastern provinces.

China is currently witnessing surging natural gas demand, with gas imports expected to rise more than 40%. Hence, it is necessary to promote the development of underground gas storage facilities in the country.

Sinopec is currently engaged in significant projects, including the Zhongyuan gas storage cluster and Huangchang gas storage facility in Hubei province, aiming to improve peak shaving and gas storage capabilities in the country.

Company Profile & Price Performance

Headquartered in Deyang, China, Sinopec is a leading integrated energy company that engages in the exploration, production and transportation of petroleum products. It is the largest refiner and marketer of refined petroleum products in China.

Shares of the company have outperformed the industry in the past three months. The stock has gained 8.2% compared with the industry’s 4.3% growth.

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Zacks Rank & Stocks to Consider

The company currently carries a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are Cenovus Energy Inc. CVE, EQT Corporation EQT and Forum Energy Technologies, Inc. FET, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cenovus’ earnings for 2021 are expected to increase 62.1% year over year.

EQT’s earnings for 2021 are expected to surge 137.3% year over year.

Forum Energy’s earnings for 2021 are anticipated to grow 85.1% year over year.

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EQT Corporation (EQT) : Free Stock Analysis Report

China Petroleum & Chemical Corporation (SNP) : Free Stock Analysis Report

Cenovus Energy Inc (CVE) : Free Stock Analysis Report

Forum Energy Technologies, Inc. (FET) : Free Stock Analysis Report

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