BP plc BP and Sinopec Fuel Oil have come together to form a joint venture named BP Sinopec Marine Fuels Pte Ltd for the bunkering of marine fuels. Each company will have 50% interest in the joint venture.

The joint venture will be based in Singapore, which is one of the world’s largest and busiest ports. The joint venture will benefit from its partners’ existing bunkering locations and activities.

BP Sinopec Marine Fuels will also provide marine bunker sales in major locations worldwide along with marine bunkering in Singapore.

BP Sinopec Marine Fuels will function from ports in Singapore; Fujairah, United Arab Emirates; Antwerp, Belgium; Rotterdam and Amsterdam in the Netherlands; Tianjin, Qingdao, Shanghai, Ningbo and Shenzhen, China.

BP is one of the major energy companies of the world, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemical products. Sinopec is a leading oil and natural gas producer, as well as the largest refiner and marketer of refined petroleum products in China. Both the companies, with their respective expertise, are expected to build an efficient and competent joint venture.

BP is offloading its non-core upstream properties while creating a portfolio with potentially stronger growth from a smaller base. The company has already sold the refineries in Carson, CA and Texas City, which hold half of its U.S. capacity. It has, however, retained three refineries – Cherry Point, Toledo (co-owned with Husky Energy), and Whiting – with the greatest competitive advantage which, in turn, is expected to improve returns.

On the other hand, China’s impressive economic growth has significantly increased its demand for oil, natural gas and chemicals. This growth momentum presents attractive opportunities for industry players that can meet the country’s fast-growing energy needs. Being one of the two integrated oil companies in China, Sinopec is well positioned to capitalize on these favorable trends.

Both BP and Sinopec currently carry a Zacks Rank #3 (Hold). Some other players from the same space include Transmontaigne Partners L.P. TLP, CNOOC Ltd. CEO and Pembina Pipeline Corporation PBA. All these stocks sport a Zacks Rank #1 (Strong Buy).

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