SINGAPORE (Reuters) - Privately controlled Zhejiang Petrochemical Corp (ZPC), operator of China's largest refinery, said on Thursday it has reached a strategic agreement with state refining giant Sinopec on the domestic marketing of its fuel.
Under a deal reached earlier this week, Sinopec will handle more than 60% of ZPC's domestic refined products sales, worth about 55 billion yuan ($8.0 billion) a year, the company said in a statement posted on its WeChat account.
China, already with the world's largest refining capacity, is continuing to add processing plants, with production far outpacing growth in fuel demand and competition for home fuel markets becoming more fierce.
"With the growing new refining capacity at home, the mismatch between refined fuel supply and demand will become more and more prominent," ZPC said in the statement.
ZPC, controlled by private chemical group Rongsheng Petrochemical Co Ltd, operates an 800,000 barrels-per-day refinery in the eastern port of Zhoushan.
Earlier this week, Rongsheng Petrochemical agreed to sell a 10% stake in itself to Middle Eastern energy giant Saudi Aramco for $3.6 billion. The deal included agreements on Aramco supplying crude oil to two Chinese refiners, oil storage for the Saudis in Zhoushan and the supply of petrochemicals from Rongsheng back to Saudi Arabia over a span of 20 years.
(Reporting by Chen Aizhu; Editing by Tom Hogue)