Sinopec to mix oil and water at Easy Joy locations

China Petroleum and Chemical Corp, also known as Sinopec, will start selling glacier water at its 23,000 Easy Joy convenience stores, cooperating with a Tibetan company in an attempt to introduce further mixed-ownership reform.

The oil company signed an agreement with Tibet Highland Natural Water Ltd on Thursday to establish a glacier water brand and use Sinopec's retailing network to sell it nationwide.

Sinopec says the bottled water has been sent to 11 provinces and cities, including Beijing and Shanghai. Its gas service stores will start selling the brand on Aug 15.

"It is a new attempt by the company to enter the drinking water industry, which echoes the central government's encouragement to develop Tibet's water resources," said Zhang Haichao, president of Sinopec Sales Co Ltd.

Tibet has 448 billion cubic meters of surface water, one-seventh of the nation's reserve.

Zhang said the cooperation will be a win-win situation. The Tibet water company, established in 2010, has advanced technology and experience of the bottled water industry, while Sinopec has more than 30,000 gas stations and 23,000 stores visited by 80 million regular customers annually.

Sinopec started its non-fuel businesses, featuring convenience stores, dining and auto services, in 2008. The company's non-fuel revenue totaled 13.3 billion yuan ($2.16 billion) in 2013 and it expects the figure to reach 15 billion yuan this year.

Sinopec has been a pioneer of mixed-ownership reform as the government encourages more private investment in State-owned enterprises, said Han Xiaoping, chief information officer of China Energy Net Consulting Co Ltd.

In 2010, Sinopec's subsidiary in the Ningxia Hui autonomous region in northwestern China entered into the medlar or Chinese wolfberry industry by establishing a new brand and selling it at more than 10,000 gas service stations.

Last week, Sinopec signed a strategic cooperation framework with Taiwan Ruentex Group to develop non-oil businesses, including convenience stores, e-commerce and financial services. In developed countries, up to 50 percent of gas stations' profit comes from non-fuel products. More than 95 percent of gas stations in the United States have convenience stores.

Sinopec and other domestic gas retailing companies are facing increasing competition from foreign counterparts. Multinational oil company Royal Dutch Shell Plc owns around 1,100 service stations in China.