ZPC, a Chinese refiner, enters into a strategic fuel marketing agreement with Sinopec.

According to a recent agreement, Sinopec will be in charge of over 60% of ZPC's sales of refined products within the country. The company disclosed this information through a statement on their WeChat account, stating that this amount is valued at approximately 55 billion yuan ($8.0 billion) annually.

China has the biggest refinery capacity in the whole world. However, they are still constructing more processing facilities. This results in an abundant supply of fuels without an equivalent increase in fuel demand. Consequently, the competition in the domestic market intensifies as more fuel companies vie for their share in the market.

ZPC announced in a statement that as refining capacity increases domestically, the gap between the supply and demand for refined fuel will become increasingly noticeable.

ZPC manages a refinery located in the Zhoushan port in the east. This refinery has the capacity to produce 800,000 barrels of oil per day and is owned by the private chemical company, Rongsheng Petrochemical Co Ltd.

At the start of the week, Rongsheng Petrochemical made a deal with Saudi Aramco, a large energy company from the Middle East, to sell them 10% of its company for $3.6 billion. As part of the agreement, Aramco will provide crude oil to two Chinese companies that refine oil, store some of their oil in Zhoushan and get petrochemical supplies from Rongsheng for 20 years.

Written by Chen Aizhu; Revised by Tom Hogue.