10:18     SINOPEC KANTONS<00934> - Announcement (2)                           

    Jetty                                                                     
                                                                              
    Nature of transaction and the connected party                             
                                                                              
    Huade has provided and will continue to provide the following             
    services and facilities to Sinopec Guangzhou Branch through the           
    Huizhou Jetty:                                                            
                                                                              
    (i)     jetty and related services concerning the unloading of crude      
    oil from oil tankers and dockage;                                         
                                                                              
    (ii)    crude oil storage facilities and related services                 
    concerning the storage of crude oil in oil tanker and oil tanker          
    handling; and                                                             
                                                                              
    (iii)   crude oil pipeline facilities and related services                
    concerning the transmission of crude oil from the Huizhou Jetty           
    to Sinopec Guangzhou Branch's refinery complex in Guangzhou City.         
                                                                              
    Pricing basis and cap                                                     
                                                                              
    Pursuant to the Sinopec Corp. Framework Master Agreement, Huade           
    will enter into a separate crude oil jetty service agreement              
    with Sinopec Guangzhou Branch annually. The parties will                  
    negotiate with reference to, among other factors, law and                 
    regulations, market conditions, normal commercial terms, trade            
    customs and the principle of fairness and will conclude the               
    detailed terms and provisions in the agreements.                          
                                                                              
    Pursuant to the Sinopec Corp. Framework Master Agreement, the             
    service fees payable by Sinopec Guangzhou Branch and received             
    by the Group in respect of (i) above is based on the                      
    State-prescribed prices, being regulated and standardised by              
    the PRC's Ministry of Communications. The service fees payable            
    in respect of (ii) and (iii) above are charged on the basis of            
    government-approved prices, being approved by the Guangdong               
    Price Bureau.                                                             
                                                                              
    If the State-prescribed prices or the government-approved prices          
    (as the case may be) of any of the above services are abolished,          
    the service fees payable by Sinopec Guangzhou Branch shall be             
    (a) the fair market price for the relevant service (to be                 
    determined by the parties after consultation); or (b) if no               
    market price is available or agreed between the parties, the              
    previous State-prescribed prices or government-approved prices            
    (as the case may be) plus a margin not exceeding the rate of              
    increase of the consumer price index for Guangdong Province               
    during the immediately preceding calendar year.                           
                                                                              
    The aggregate amounts received by the Group in respect of this            
    connected transaction for each of the two years ended 31 December         
    2003 were approximately HK$305.74 million and HK$278.38 million.          
                                                                              
    The Directors expect that this connected transaction will                 
    continue and the monetary amount will increase. The aggregate             
    transaction amounts will be within a maximum annual cap of HK$350         
    million, HK$500 million and HK$500 million for each of the three          
    financial years ending 31 December 2005, 31 December 2006 and             
    31 December 2007 respectively.                                            
                                                                              
    Reasons for the transactions and cap                                      
                                                                              
    The Group entered into the connected transaction for the reason           
    that, given the availability and quality of the above services            
    and the proximity of Huade crude oil jetty to Sinopec Guangzhou           
    Branch, the latter always relies on the provision of services             
    by the former.                                                            
                                                                              
    In arriving at the cap, the historical figures were taken