BEIJING, June 7 -- China Petroleum & Chemical Corp (Sinopec), Asia's biggest oil refiner, says it is not buying out its largest listed unit Sinopec Shanghai Petrochemical Co Ltd.

    "The company has no plan at present to buy back Shanghai Petrochemical A shares," Sinopec said yesterday in a statement posted on its website, denying a media report.

    The Beijing-based oil refiner "is planning to pay 5.7 billion yuan (US$711.3 million) to buy back A shares in its unit at 7.8 yuan (97 US cents) to 8 yuan (US$1) per share," a premium of 28 per cent to Shanghai Petrochemical's last traded price of 6.24 yuan (78 US cents) on Monday, Oriental Morning Post, a Shanghai-based newspaper, reported yesterday.

    Fuelled by the report, shares in Shanghai Petrochemical on the Hong Kong Stock Exchange surged by as much as 23 per cent before trading was suspended yesterday.

    Both Shanghai Petrochemical and Sinopec's share trading were suspended on the Shanghai Stock Exchange before the market opened yesterday.

    Sinopec and its subsidiary Shanghai Petrochemical, the country's top ethylene producer, are both listed in Shanghai, Hong Kong and New York.

    Sinopec, China's second largest oil and gas producer, has, since its listing in 2000, made clear its ambition to buy back its Chinese-listed units in a bid to streamline its sprawling operations, curb internal competition and cut costs.

    The oil and gas giant made Zhenhai Refining & Chemical Co Ltd and Beijing Yanhua Petrochemical Co Ltd, private last year.

    Sinopec completed a HK$3.8 billion (US$487 million) buyout of Beijing Yanhua Petrochemical Co, the nation's largest plastics maker, in March last year.

    The Beijing-based refiner completed the buyout of four listed units for 14.3 billion yuan (US$1.8 billion) in April.

    On February 15 the refiner offered to buy the remaining shares of Sinopec Qilu Co at 10.18 yuan (US$1.27) each, 24 per cent more than the stock's previous close.

    It offered 13.95 yuan (US$1.74) each for shares in Sinopec Yangzi Petrochemical Co, a 26 per cent premium, and 12.12 yuan (US$1.51) a share for Sinopec Zhongyuan Petroleum Co, a 13 per cent premium. It offered 10.3 yuan (US$1.2) a share for Sinopec Shengli Oil Field Dynamic Group Co, a premium of 17 per cent.

    Sinopec may have to spend more than US$4 billion buying out other remaining units, according to analysts' estimations.

    Shanghai Petrochemical, which is 55.56 per cent owned by Sinopec, is among one of the remaining units.

    Due to rising oil costs, Shanghai Petrochemical reported 154.3 million yuan (US$19.2 million) losses in the first quarter this year, the company said in April.

    Market watchers said Yizheng Chemical Fibre Co Ltd, listed in Hong Kong and based in East China's Jiangsu Province, may be Sinopec's next target.

    Sinopec's buy-back move followed its domestic rival PetroChina, China's largest oil and gas producer, which has bought back all the public shares of its three listed subsidiaries based in northeastern China.