TOKYO�Japanese trading house Marubeni Corp. says it has struck a deal with Chinese state oil group China National Petroleum Corp. (CNPC) to build a manufacturing plant to supply materials to a proposed Chinese crude and natural gas pipeline project. This may be a first step toward investing in the pipeline project itself.
The project involves the construction of 4,200 km crude and natural gas pipelines linking Urumqi, the capital of northwestern Xinjiang Uygur Autonomous Region, to Shanghai in a bid to meet the growing energy demand in this booming Chinese eastern coastal city. The plant is seen as Marubeni's first step to participate in this long-distance mainland pipeline project.
The corporation said it will hold a 25% stake in the new joint venture plant's $30 million capital base, with CNPC controlling 70% and another local company 5%. Production is slated to begin in the fall of next year.
Although it has yet to make a final decision on whether to become involved in the pipeline project itself, a Marubeni official told OGJ Online that the company "is definitely interested in the project."
Meanwhile, Marubeni has announced a sharp rise in net consolidated profit for the year ended Mar. 31, 2000. It posted net profit of �2.06 billion compared with a �117.7 billion loss suffered in the previous year. However, Marubeni's net consolidated sales revenue, which totaled �10.2 trillion, was down 14.5% year-on-year.
The company reaped higher returns from its energy business but says it was hurt by poor performance from its metals and petrochemicals divisions. Sales revenue from its energy division climbed 12.3% year-on-year due to the rise in oil prices. Returns from the petrochemicals business were unchanged, although its income fell year-on-year.
Combined returns from Marubeni's energy-petrochemicals division rose 3.3% from the previous year to �156.3 billion. However, earnings from the company's metals business totaled �41.4 billion, down 9.9% year-on-year.
