Sinopec provides several thousands of varieties of petrochemical products, ranging from natural gas to oil products, for a diverse customer base. Our customers range from downstream vendors in industries including automobile, textile, electronics and electrical appliances, building materials and packaging, to users of transportation and agricultural machinery and to over 15 million daily gas station customers. These customers are scattered across different fields and territories, with different needs and preferences. Meanwhile, improved living standards, increasingly stringent environmental requirements and a general trend towards a low-carbon economy all make the customer needs more diversified and challenging. For this reason, we continuously raise our service level and endeavor to provide highest-quality products, stable and easily accessible service system and user-friendly way of service.

Stable and sufficient supply

We are deeply aware that we are duty bound to support national economic development and national energy security.

At ordinary times, we are a supplier of oil and petrochemical products and services and concerned about how to provide high-quality products and top-class service. When undersupply situation occurs, we make every effort to ensure stable and sufficient energy supply through our omnipresent distribution channels.

We always give the top priority to ensuring a stable energy supply, try every means to expand the existing pool of resources and ensure sufficient energy supply, be it in extremely difficult situation, or in case of undersupply in local areas or when a natural disaster hits. In doing this, we effectively support normal operation of the national economy and maintenance of public order.

Second and third quarters are critical periods of agricultural production in China, during which oil demand in rural areas is huge. Our core markets across the country cover most agricultural provinces. In recent years, we took various measures to ensure sufficient energy supply in support of agricultural production, winning recognition from all walks of life.

In 2009, as a result of global financial crisis, the consumption structure of domestic refined oil market significantly changed, leading to temporary undersupply of gasoline and oversupply of diesel oil. To maintain a balance between supply and demand, Sinopec promptly readjusted its oil product mix. In late 2009, many regions of the country suffered heavy snow and a sharp temperature drop, resulting in significantly increased demand for heating gas. We initiated wintertime gas supply scheme ahead of time and significantly reduced in-house gas consumption of its subsidiaries in order to ensure sufficient natural gas supply to local residents and utility companies.

New and high-quality products

Sinopec is the largest producer and supplier of oil products and petrochemical products in China. In 2009, our refined oil output reached 115 million tons and combined synthetic resin, rubber and fiber output 13.39 million tons.

As an energy and chemical company whose products are daily necessities for the general public, it is a primary responsibility for Sinopec to provide high-quality products and meet the energy needs of consumers and economic development. We make every effort to meet customer requirements and needs through best management practices and technical innovation.

In response to the growing concern about the effects of vehicle exhaust emissions on the environment, upgrading the quality of oil products for less emission has become one of our top priorities. To this end, between 2005 and 2009, Sinopec invested over 11 billion RMB in construction and renovation of refining plants and development of clean fuel technology suitable for Chinese national conditions. Meanwhile, 6.4 billion RMB was invested in construction of 27 new refining plants and revamping of 9 refining plants using Sinopec’s self-owned technology. In 2009, refining plants at Gaoqiao area of Shanghai were renovated successfully in preparation for the upcoming World Expo, in order to provide gasoline products that meet the more stringent quality criteria laid down by Shanghai government.

In 2009, 60 oil quality improvement projects at 24 Sinopec refineries were underway or planned. After these projects were completed, Sinopec’s gasoline products will all meet GB III.specification In particular, gasoline products produced at Sinopec refineries in Beijing, Shanghai, Guangzhou and other provincial capital cities will meet the quality requirements for less than 50 ppm sulfur content; vehicle diesel oil products from these refineries will meet the European quality standard III.

We believe that good products not only meet national and corporate quality standards, but more importantly, evolve continuously to better meet the user requirements and needs. Just with this attitude, we won customer loyalty. In 2009, Sinopec’s Great Wall lubricants were chosen and used for the second Beidou second-generation navigational satellite, Practice #11 satellite, Hope #1 scientific research satellite launched in China, which once again demonstrated the top-class quality of Great Wall brand. Also in the same year, over 20 varieties of Sinopec products under the Great Wall brand including synthetic damping feul, high and low-temperature grease lubricants and synthetic braking liquid were successfully used in the 60th National Day celebrations.

Technological progress and raised living standard also challenge us to innovate, especially in the field of new-type synthetic materials, where our research personnel are supposed to explore through trial and error. For example, soft water tank and connecting tubes for use in astronautic wear elaborately developed by Sinopec for China Shenzhou #7 Spaceship, successfully withstood the tests of space flight and aerospace walk. The recently launched NEP polyester product is a heavy metal free ecologically preferable polyester product with better gloss and transparency than conventional products. Textile products incorporating this polyester product not only look good but also meet increased environmental standards. In 2009, 41% of synthetic resin output at Sinopec was new products and special-purpose materials; 57% of polyester output was special-purpose materials; and the differentiation rate of synthetic fiber products reached 60%.

Comprehensive and easily accessible service system

Sinopec has built a service system covering R&D, production, distribution and marketing.

Through many years’ development, Sinopec has grown to operate 35 refineries in China with total refining capacity of 229 million tons. Seven one-MTA ethylene plants were built in Yanshan, Tianjin, Shanghai, Zhenhai, Qilu, Yangzi and Maoming, with total ethylene production capacity of 7.29 MTA.

We are also the largest refined oil distributor in China with China’s largest distribution network consisting of 29,700 gas stations. We own and operate a 7,270 km-long finished oil pipeline network, the longest finished oil transmission pipeline in the country. Our natural gas transmission pipeline is 5,288 km long and carries 7.06 billion cubic meters natural gas a year. Oil tanks and docks grow in number and a comprehensive logistics system was built in place.

We are working hard to complete an integrated service system covering production, distribution and R&D, building a customer-focused business process from distribution to production and then to investment in order to provide better, more consistent and convenient service and add greater value to our customers.

As the petrochemical industry is on the forefront of the value chain, we regard customers as both an extension and a vital component of our value chain, organize chemical distributors, research institutions and producers to set up technical service teams of different forms and ensure satisfactory technical service before, during and especially after sales. In doing so, we provide product improvement solutions, promptly resolve problems our customers encounter in use of our products, help them gain competitive advantages and work with them to promote development of the entire value chain.

On the other hand, Sinopec also signed strategic partnership agreements with 23 major Chinese companies, including Baosteel, China First Heavy Industries, China National Erzhong Group Co and Shenyang Blower Works Group Co., Ltd, as well as ten multinational corporations like GE, to effectively support the secure and stable supply of key equipment and materials required for production operations. While ensuring efficient operation of our service system, we made contribution to restructuring of product mix, technological progress, and the sustainable development of major equipment manufacturers in China.

Continuously improved information system is also essential to provision of comprehensive and convenient services. For example, in order to become more responsive to customer demand for oil products, Sinopec endeavored to complete its market forecasting system and information network by setting up 28,000 data acquisition stations, enabling real-time monitoring of market demand and timely distribution of oil products. We made the transaction process transparent by establishing a customer relations management system (CRM), allowing customers to keep informed of the transaction progress all the time. Through establishment of the logistics information system, we achieved door-to-door logistics services for customers.

Sinopec also provides world-class refining and chemical engineering services and is capable to build 10 MTA refineries with its own technology. In 2009, Sinopec worked on a series of key engineering projects in China, including Sichuan-East China gas transmission pipeline, Fujian refining and ethylene integration project, Tianjin refining and ethylene integration project and Zhenhai 1 MTA ethylene plant project. In the same year, Sinopec won the bid for construction of six overseas projects with newly-signed value worth of 1.264 billion dollars in total including construction of a new aromatic hydrocarbon plant at Atyrau Refinery, Kazakhstan. In this year, 960 million dollars contract value was completed.

“Sinopec is a longtime strategic partner of Shenyang Blower Works Group Ltd. Over the past years, Sinopec provided generous support to our company, as well as numerous opportunities of localization of key petrochemical equipment. Sinopec set up a warehouse for major equipment and spare parts at our company and worked with us to fight through difficulties and manufacture several hundreds of major petrochemical plants that would otherwise have to be imported from abroad, enabling our company to rapidly improve our capability to manufacture key petrochemical equipment as well as enhance our core competitiveness substantially, and making our company the largest general-purpose machinery manufacturer in China.

“Sinopec insightfully and courageously engaged our company to develop a 1 MTA ethylene plant and worked with us to create the first Chinese-made ethylene plant. This is very important to improve the capabilities of Chinese manufacturers to manufacture key equipment and to enhance national energy security.”

Flexible and user-friendly way of service

Providing customers with flexible, effective and high-quality services is an unremitting pursuit of Sinopec. To this end, Sinopec continuously improves its way and level of service with every possible measure. To keep abreast of the customer requirements and needs, the company’s top management frequently visits customers’ premises to address customer complaints right on the spot.

To respond to the seasonal peak demand, inclement weather and emergencies, Sinopec distributes its products through multiple channels. For example, when a traffic jam occurs as a result of bad weather, emergency rescue services are initiated at Sinopec gas stations to provide on-road fueling services to vehicles and drinking water, food and medical supplies to people trapped on the road. In the middle of each busy summer harvest, Sinopec not only ensures sufficient energy supply but also makes reasonable arrangements for logistics and allocation, in addition to many initiatives such as setup of special stations to exclusively provide fuel to farm machine and tractor, distribution of fueling cards and delivery of fuel to farm field through mobile fueling vehicles.

In 2002, Sinopec Lubricant Customer Service Center was set up with a toll-free hotline (400-810-9886) to further improve the service quality, which was the first customer service center ever created in Chinese lubricant industry. In 2003, Sinopec set up the first oil marketing customer service center in China and opened two complaint lines (95105888 and 95105988) for around-the-clock customer service. “Quality Service Month” campaign and questionnaire-based customer satisfaction surveys were conducted in the same time. Also in 2009, secret customers were engaged to pay regular visits to gas stations for anonymous rating of service level. December 30, 2009, Sinopec chemicals marketing customer service center was put into operation to deal with requests for quotations, automatic inquiry of account balance, product performance, order fulfillment status, logistics information, contact details, customer complaints and suggestions via a service hotline (400-818-9100).

To provide greater facilities to customers, nearly 20,000 Sinopec gas stations accept fueling card payment and provide around-the-clock rescue services to cardholders as well as fuel use management capabilities to corporate users. 12,000 convenience stores were built and put into operation at gas stations to provide a wide range of services like catering, shopping, car washing and repair. CNG fueling services will be made available at a wider scale as the natural gas business develops. Recharging services are also planned as part of service portfolio at Sinopec gas stations as electric vehicles become more popular.