On 18 Nov, the launch ceremony of Sinopec Qingdao Refining and Chemical Co.,Ltd. was held in Qingdao. The former Vice Chairman of CPPCC, Mr. Chen Jinhua, Deputy Secretary of Shandong provincial CPC Committee and Party Secretary of Qingdao, Mr. Du Shicheng, Vice Major of Shandong province, Mr. Zhang Zhaofu, Chairman of Sinopec Mr. Chen Tonghai, Vice Chairman and President of Sinopec, Mr. Wang Jiming attended the launch ceremony.

　　Qingdao Refining Project is the key petroleum and chemical project in China，and the first ten million tonnes level refinery newly established by Sinopec in 21st century, playing an important role in adjusting the domestic refining industry structure, improving international competence of the refining enterprises and well boosting the local economic development. Qingdao Refining Project was designed in accordance with the concepts and visions of 21st century refinery with the salient characteristics of the scale economy, advanced technology, leading friendly environment and etc. From the process of raw material, processing, to product refining, the whole production line adopted the hydrogen refining process technology. The process installation and system engineering adopted the integrated energy-saved expertise. In the aspects of the product structure, quality and public engineering consumption, friendly environment index and etc. rank at the leading position domestically, meet the international advanced standard.

　　The establishment of Qingdao Refining and Chemical Co., Ltd. marks the Qingdao Refining Project has been embarking on an accelerating construction path. From sources, the project is expected to be completed and put into operation in the first half of 2007. After going on stream, the annual refining capacity of the imported sour crude is estimated to be 10 million tonnes, the production of the refining oil over 7.6 million tonnes, it is estimated that over RMB20billion sales revenue will be realized, meanwhile, the product quality and every economic technology index will be improved to meet Euro Ⅲ and international advanced standard respectively.

　　Qingdao Refining Project received great support from the related departments of the State Council, Shandong provincial government and CPC committee and Qingdao city. In Feb 2001, Sinopec group, Shandong provincial government and Qingdao municipal government signed the “Letter of Intent for cooperation on Qingdao Refining Project”. Afterwards, the State Council approved the project proposal and in June 2004 formally approved the project feasibility report.

　　In addition, in order to better provide storage and transportation auxiliary service for Qingdao Refining Project, Sinopec and Huarun Petroleum and Chemical (Group) Ltd. signed the “Agreement on Shares transfer of Qingdao Qirun Petroleum and Chemical Ltd.” and the “Agreement on Options of Shares Transfer of Qingdao Qirun Petroleum and Chemical Ltd.”. The Company acquired the all shareholdings of Qingdao Qirun Petroleum and Chemical Co., Ltd. held by Huarun Petroleum and Chemical (Group) Ltd.

　　Qingdao Refining Project was invested by Sinopec, Shandong International Trust Investment Company and Qingdao International Trust Investment Company, which held 85 per cent, 10 per cent and 5 per cent equity respectively. Total investment of the project is estimated to RMB 9.713 billion (including US $0.177billion). Construction of the project is expected to be completed in 2007.
Qingdao Qirun Petroleum and Chemical Co. Ltd., established in 1993, was invested by Sinopec and Huarun Petroleum and Chemical (Group) Ltd., which held 59.5 per cent and 40.5 per cent equity respectively. The company was put into production in August 1996, and its principle operations are storage, transportation and transfer of crude, refining oil products and petrochemical products. Enditem will