PetroChina Signs Strategic Purchase Agreement with Valve Corporation for the First Time

On the morning of January 6, 2012, China National Petroleum Corporation (CNPC) entered into a strategic purchase agreement with China Nuclear Sohu Technology Industrial Co., Ltd. and Suzhou Neway Valve Co., Ltd. at its headquarters in Beijing. This is the first time that CNPC has entered into a strategic purchase agreement with a valve company. According to the agreement, the valve products of the two companies are mainly used in PetroChina's refining projects.

As of now, CNPC has established strategic purchase cooperation relationships with five major suppliers. In 2008, CNPC began to aggressively promote centralized procurement, continuously bringing together the Group's procurement needs, and establishing long-term and stable cooperation relationships with important suppliers. Since 2011, PetroChina has signed strategic purchase agreements with China First Heavy Machinery Co., Ltd., Shenyang Blower Group Co., Ltd., and Tianjin Pipe Group.

The signing of China National Nuclear Technology Co., Ltd. is the first listed company in the domestic valve industry. It has been the leading domestic valve manufacturer integrating the design, manufacture and sale of industrial valve products for 55 years. Suzhou Neway is currently the largest valve manufacturer in China and its products are widely used. Nuclear power, petrochemical, power station and shipbuilding and other industrial fields.

PetroChina seeks strategic partnerships based on the concept of cooperation in terms of safety, quality, delivery time, service, and common values ​​in order to adapt to changes in domestic and foreign markets. Promoting the implementation of strategic procurement will help promote the realization of the material procurement supply chain optimization and management concept to achieve a greater leap forward, and play a prominent role in reducing operating costs and improving the efficiency and effectiveness of procurement. PetroChina and the two valve companies will deepen their cooperation in the areas of “resource sharing, complementary advantages, equality, integrity, and common development”. After the agreement is signed, CNPC will provide a more stable resource market for China Nuclear Technology and Suzhou Newayway Valves. Under the same conditions, PetroChina will prioritize the procurement of valve-specific products within the two-valve enterprise's agreement, and ensure the procurement share for each year.

Industry experts believe that the signing of the valve product purchase agreement is a strong support for CNPC's valve equipment manufacturing industry in China. This move will effectively promote the sustainable development of the Suzhou valve brand industrial base, which is an effective way to achieve mutual complementarity and mutual benefit, optimize the allocation of resources for science and rationally, and ensure the safety, timely and economic supply of important materials for production and construction. The signing of the strategic purchase agreement will also promote the further expansion of China's oil supply and supply chain optimization and management concept, consolidate all resources and markets of the group company, concentrate the long-term resources and markets of the group company, and more fully realize the groupization and scale. And specialization advantages, reduce operating costs, improve procurement efficiency and efficiency. This also lays a solid foundation for the next step for both parties to establish a regular and regular communication and coordination mechanism.