Natural Gas

In 2023, our operating volume of natural gas was 62.5 billion cubic meters, an increase of 0.3%, among which, domestic sales reached 57.3 billion cubic meters, up by 0.7%.

The integration of procurement, transmission, storage, and sales led to a significant leap in business quality and efficiency.  We adhered to a market-orientated approach and focused on efficiency, fully tapped into the strength of the comprehensive value chain, and effectively enhanced the quality and profitability of natural gas business. We continuously optimized resource structure. We coordinated self-produced resources and incorporated new production capacity into the "resource pool". An outsourcing task force was established to increase domestic third-party outsourcing, and remarkably reduce the comprehensive cost of the "resource pool". We made reasonable arrangement for mid- and long-term shipping schedules, seized windows to supplement spot resources, actively carried out hedging in a prudent manner, and successfully managed the risk of international oil and gas price fluctuations. We achieved highly effective market operation. We made every effort to improve the pipeline gas market and innovated the pricing model by introducing fixed price and linking with long-term contracts to make better match between sales structure and "resource pool" composition, and to continuously improve the efficiency and profitability. We vigorously developed the direct sale business for LNG refueling stations and established an integrated direct sale business model of "Sinopec gas, Sinopec transmission, Sinopec use", thus maximizing the overall benefits for the Company. We fully leveraged our comprehensive advantages, actively developed high-quality terminals, promoted 43 terminal projects and implemented 10 projects throughout the year. Breakthroughs were made in facility operation. We accelerated the transformation from merely operating storage and transmission facilities to carrying out asset management. We actively studied asset optimization approaches, opened the facilities to external customers, innovated the operation of gas storage capacity, launched diversified products such as gas storage capacity leasing, dual buyout, and consignment storage and transportation, and improved the efficiency and profitability of these facilities.

The project construction was proceeded with high quality and efficiency, and the facility layout became increasingly comprehensive.  We focused on the presence while taking a longterm view, abided by the principle of matching resources, facilities, and markets, coordinated the optimized planning of new facilities and the pace of construction, and accelerated the build-up of a balanced facility layout. We carefully drew a new blueprint for facility layout. We conducted a mid-term evaluation of the 14th-Five-Year-Plan for development, adjusted the development paths and goals from 2023 to 2025, and optimized facility planning and investment pace. We continuously improved the pipeline planning for the Shandong-Jiangsu-Anhui region, and sped up the feasibility study on the resource base and exporting channels for Shunbei, Hongxing, and Tongnanba blocks. We also advanced the upgrading and renovation of the Jiqing pipeline project and its interconnection with the Zilai Line, Qingdao high-pressure pipeline network, and Qingdao submarine pipeline, to build a "big cycle" of an interconnected pipeline network. We pressed ahead with the project constructions. By optimizing constructions for LNG projects, Tianjin LNG Phase I won the National Quality Engineering Award. The world's largest and China's first 270,000 cubic meters LNG storage tank in Qingdao was successfully put into operation, with a localization rate of over 95%. Four storage tanks for Tianjin LNG Phase II and Qingdao LNG Phase III were completed and put into operation. The main part of Guangdong Huaying LNG terminal was completed. The LNG projects in Yantai Longkou and Guangxi Phase III were steadily advancing. We strived to implement the interconnection of our own pipelines, completed and put into operation the Zhucheng-Gaomi section of the Shandong East Truck Line, and completed the main part of the East Branch of Anhui Northeast Pipeline. The advantage of the regional pipeline network was further consolidated. We carried out improvement of the branch pipeline project. The pre-commissioning certification was completed for the Dingshan shale gas export pipeline. The Pengzhou Petrochemical gas supply line and the eastern gas source pipeline of the Zhongyuan gas storage were completed and put into operation. The construction of the terminal pipelines such as Hepu-Bobai-Pubei, Xinji-Zanhuang, and Nanling-Fanchang were proceeded as planned. We carried forward with the gas storage projects. 557 thousand cubic meters of cavern was built for the Jintan and Huangchang gas storage facilities throughout the year.

Refined Oil Products and EasyJoy Services

In 2023, the total sales volume of oil products and gas reached 245 million tonnes, up by 14.7%. The domestic sales volume of refined oil products was 188 million tonnes, increased by 15.8%, of which the retail volume was 120 million tonnes, up 12.4%. The sales volume of natural gas was 5.6 billion cubic meters, up 33.9%.

Oil and Gas Marketing and Services.  We strengthened the ability to coordinate resources, flexibly adjusted the structure of resource allocation, and effectively maintained domestic supply-demand balance. In terms of direct sales and distribution, we standardized business processes and implemented customer classification services, achieving a 22.3% increase. In terms of retails, we aimed at dynamic competition scenario, coordinated all resources for our targeted markets, making a 3% increase in sedimentary funds from marketing of refueling cards. X-Power Series marketing drove the sales of 98^# gasoline to exceed 1 million tonnes. We built up break lounges and offered complimentary meals to divers in 13% of our service stations, which contributed 34% of our diesel retail sales total, significantly enhancing profitability. In terms of natural gas, we promoted cooperation with Sinopec Gas Company and oilfields with LNG resources, highlighting the integrated advantages of production, logistics and marketing and further enhancing the competitiveness. We continuously deepened cooperation with strategic customers, with "HQ to HQ" strategic customers covering over 10 industries and over 40 enterprises. We optimized and improved the national unified customer service center marketing platform, and increased customer satisfaction rate to 99%. We continued to work with the law-enforcement bodies to crack down on illegal activities, strengthened the supervision on trade and terminal consumption, and deepened the special crackdown on fuel dispenser cheating in the marketplace.

EasyJoy Service and Marketing.  We built up themes and created activities to boost holiday consumption, with sales at the EasyShare Festival exceeding 10 billion yuan. We diversified our services, built more in-house brands, created core model stores, and built a unified enterprise Wechat platform, with the store retail sales increased by 13%. We steadily promoted the "going out" services, entering communities, schools, and military camps. 600 comprehensive car service stores and 9,556 car service projects were built, with new car sales expanded, environmentally friendly chemical products entering the "Ten Billion Club", making the development path of the car ecosystem clearer. We constantly expanded online platforms, attracting over 100 million members and over 66 million monthly active users. The recharge amount of "Sinopec Wallet" was 155.3 billion yuan, increased by 52%, with a total of 154 million users and an online transaction volume exceeding 700 billion yuan.

Marketing Network.  The Company steadily promoted the upgrading of oil and gas networks. We newly built 720 new gasoline stations and 158 gas stations, revitalized 240 inefficient stations, upgraded 8,000 gasoline stations, and continuously improved the image stations and stores with 19,000 old stations renovated and 3,600 stations illuminated at night. We optimized the layout of oil depots, promoted the sharing of storage and transportation facilities, and renovated 30 intelligent oil depots, fairly successfully streamlining our networks.

New Energy Business.  The charging network developed rapidly, with 3,909 new charging and swapping stations and 39,600 charging terminals built throughout the year. The annual charging and swapping capacity increased by 186%, and a new energy information management platform was established. The national charging network and the first operating platform begun to take shape. The development of hydrogen refueling networks advanced steadily, with 30 new hydrogen refueling stations developed throughout the year, ranking first in the world in terms of the number of refueling stations. We opened up four hydrogen energy corridors, namely Chengdu-Chongqing-Wanzhou, Beijing-Tianjin-Tangshan, Shanghai-Jiaxing-Ningbo and Jinan-Qingdao, with a hydrogen refueling volume of 3,472 tonnes, increased by 100%, and achieved a doubling growth for three consecutive years. The Company steadily sped up the construction of photovoltaic projects, with 1,211 new distributed photovoltaic power generation projects built throughout the year, with a total installed power of 133 megawatts and a photovoltaic power generation capacity of 110 million kW-h, an increase of 138%.

Fuel Oil

Our annual operating volume of fuel oil reached 34.93 million tonnes, up 14%.

Creating a new model of sustained and stable profitability for domestic bonded oil.  We coordinated the development of specialized business strategies for low sulfur bunker fuel, MGO and high sulfur bunker fuel, increased the promotion of quality flow meters, built offshore mobile gas stations, and leveraged the advantages of petrochemical resources. We achieved a total production and sales volume of 6.3 million tonnes of low sulfur bunker fuel and 540,000 tonnes of MGO from 19 refineries, with an operating volume of 9.05 million tonnes, accounting for 42% of the domestic market with a leading position. Adhering to the combination of physical and paper trading and reasonable arrangement of structure, the annual low sulfur bunker fuel spot discount remained stable at around 40 US dollars/tonne, achieving a benefit of 520 million yuan, paving a new path that conformed to market laws and continued to maintain stable profitability.

The quality of domestic trade business operations achieved new improvements.  We steadily promoted resource acquisition, raw material supply, maritime police fuel supply, and inland waterway bunker fuel supply business, achieving the transfer of Jiangsu Water Station in the same year, profitability in the same year, and maintaining a monthly revenue of over a thousand tonnes. We actively cultivated loyal customers for domestic trade ship refueling, such as shipping, scientific research, official business, and shipyards, and added 143 new end customers. We implemented packaged supply of "fuel + lubricants + paint + cables + fresh water + daily necessities" for customers such as the Navigation Bureau, and jointly carried out "fuel plus lubricants" marketing to continuously improve the one-stop service level of ships. In China, we completed the operation of the first distributed methanol on-site hydrogen production equipment, the first demonstration of B5 bio-diesel refueling at a water station, the first container ship to container ship biofuel refueling, and the largest scale ship to ship biofuel refueling.

Other Refined Oil Products

In 2023, the total operating volume of self-sold refining products was 38.12 million tonnes, up 5.8%. The operating volume of LPG and petroleum coke remained at a level of over ten million tonnes, and the operating volume of sulfur reached a historic high. We actively promoted the "oil to specialty" technology research and development, the production and sales of high-end customized products such as high olefin LPG, needle coke, negative electrode special coke, low emission anode special coke, and clean and environmentally friendly asphalt reached 1.96 million tonnes, up 15%, with a profit of 940 million yuan. In Jinling Petrochemical Company, needle coke was applied for the first time in the production of 600mm large-size ultra-high power graphite electrodes, officially entering the ranks of high-end products production and applications. The odorfree asphalt project was successfully constructed in Guangzhou and Shanghai, promoting China's main building materials for highway construction to move towards green environmental protection.

The annual sales of lubricating oil and grease reached 1.321 million tonnes, up 4%. We adhered to the construction and improvement of new quality productivity through technological innovation, actively supported the development of strategic new industries, and achieved breakthroughs in key core independent technologies such as hydrogen fuel cell coolant, constant temperature liquid for new energy vehicle battery inverters, and high-temperature synthetic heat transfer grease. We also obtained the first and only technical certification from industry leading enterprises such as Huawei and NGC in China, and achieved supporting applications in multiple data centers and electric vehicle charging piles. Throughout the year, 106 invention patents were authorized and 50 OEM certifications were obtained. The high-speed rail gear oil series products were chosen as the designated oil and matched with the Jakarta–Bandung High-Speed Railway, achieving independent technology overseas application output.

Chemical Products

Ensuring stable supply of chemical products and raw materials.  We strengthened resource coordination and management, regional collaboration and linkage, working together in the raw materials and products, and resolutely fulfilling the main responsibility of ensuring market supply and maintaining the stable and healthy development of the industrial chain. The Company refined and formulated the "one enterprise, one system" plan, optimized market layout in advance, ensured the supply of raw materials for multiple new devices inside and outside the system, and achieved stable entry of new production capacity into the market. We improved emergency support capabilities, overcame adverse effects such as operational shutdowns, reduced load operations, and unexpected situations, and took multiple measures to achieve raw material balance and product replenishment. Adhering to market orientation and starting from customer needs, we guided production subsidiaries to dynamically optimize production scheduling, increase production of marketable products, timely connect with downstream customers, and coordinate product delivery arrangements. We conducted special research around key areas such as new materials and fine specialty chemicals, worked on medium and long-term development trends, and improved the efficiency of new product incubation and market development.

Continuously improving customer service levels.  Being customer-centric, we optimized and adjusted the marketing model of chemical products, providing downstream customers with "one-on-one, one-stop, packaged and full-process" solutions, continuously improving the service awareness and capability of all staff, and achieving better satisfaction scores for third-party customers than our peers. We established and improved a standardized customer service system, implementing customer life cycle management, focusing on customers' needs, reducing customer costs, and enhancing customer satisfaction. We explored new models of personalized customization and flexible production, deeply developed customer relationships, and strived to provide best services. Demands were collected, analyzed and predicted from the industry chain, guided by customer needs, providing sufficient support for production, sales, research, and supply chain collaboration. We adhered to customer needs as the driving force, reduced customer transaction costs, and improved the convenience, targeting, and effectiveness of customer service. Based on the customer perspectives, we streamlined the customer service process, optimized customer service standards for multiple types and different scenarios, identified breakpoints and bottlenecks in customer demand transmission and response processes, smoothed the "highway" of customer service, and fully leveraged the comprehensive functions of the customer service standardization system in concept transmission, quality capability improvement, strategic achievement, performance realization, and other aspects. We built a comprehensive basic training system covering product knowledge, business communication, management systems, and information systems, enhanced the professional competence and skills of our counter personnel, created a professional image of integrity, professionalism, good listening, trustworthiness, and customer first, and gradually cultivated a distinctive service culture.

Actively pushing forward the research and development, promotion, and application of new chemical materials.  Based on original research and development, customized production, we closely collaborated with production subsidiaries, interacted with scientific research institutions, promoting product quality iteration and technological upgrading, advancing new material research and development, and accelerating industrialization process. We integrated product engineers, expert service systems, and product knowledge bases into the development and application platform of new synthetic materials products, achieving closed-loop management of customer information collection, gateway management, scientific research and development, trial feedback, and quality improvement.

Actively practicing green, low-carbon, and safe development.  We integrated green concepts into marketing, targeted low-carbon and environmentally friendly chemical products, accelerated the market layout of photovoltaic, biodegradable, recycling, and automotive light-weighting. We continuously increased the proportion of railway and waterway transportation, vigorously developed diversified transportation such as rail, public rail, and public water, and promoted the coordination of multiple transportation modes. The Company constantly strengthened HSE management in the sales process of chemical products, and enhanced the tracking and control of the entire process of hazardous chemical sales.

Catalysts

We accelerated the transformation and localization of new catalyst products, and achieved industrial application of new catalyst products such as RTC of Anqing Petrochemical Company, cascade pores of Jinling Petrochemical Company, anode iridium for hydrogen electrolysis of Yanshan Petrochemical Company. We completed the domestic substitution of catalysts such as polyolefin for Zhongke Refining and Chemical project, ethylbenzene dehydrogenation of Shanghai SECCO Company, and boiling bed of Zhenhai Refining and Chemical Company. The Company organized the first loading and start-up services of catalysts for projects such as catalytic cracking at Guangdong Petrochemical Company and continuous reforming at Huizhou Petrochemical Company. Catalysts such as propane dehydrogenation and continuous reforming won orders for the first time from subsidiaries such as Zhejiang Petrochemical Company and Ningbo Zhongjin Petrochemical Company, achieving the first domestic substitution of imported catalysts bundled with processes. The liquid-phase ethylbenzene catalyst was industrially applied for the first time in the PO/SM units of Zhejiang Petrochemical Company. The coal tar hydrogenation catalyst won orders from Shaanxi Future Energy and Chemicals Company and Ningxia Coal Industry Company. We actively made our debuts in the market, obtained 43 orders outside Sinopec Group, with out-house sales revenue increased by 61%.