China's Sinopec Freezes Russia Projects As Sanction Threat Looms

China's state-run Sinopec Group has frozen talks for a petrochemical investment and a gas marketing venture in Russia, sources told Chen Aizhu, Julie Zhu, and Muyu Xu of Reuters, heeding a government call for caution as sanctions mount over the invasion of Ukraine.

Photo Insert: After Russia invaded Ukraine a month ago, China's three state energy giants - Sinopec, China National Petroleum Corp. (CNPC), and China National Offshore Oil Corp. (CNOOC) - have been assessing the impact of the sanctions on their multi-billion dollar investments in Russia.

The move by Asia's biggest oil refiner to hit the brakes on a potentially half-billion-dollar investment in a gas chemical plant and a venture to market Russian gas in China highlights the risks, even to Russia's most important diplomatic partner, of unexpectedly heavy Western-led sanctions.

Beijing has repeatedly voiced opposition to the sanctions, insisting it will maintain normal economic and trade exchanges with Russia, and has refused to condemn Moscow's actions in Ukraine or call them an invasion.

But behind the scenes, the government is wary of Chinese companies running afoul of sanctions - it is pressing companies to tread carefully with investments in Russia, its second-largest oil supplier and third-largest gas provider.

After Russia invaded Ukraine a month ago, China's three state energy giants - Sinopec, China National Petroleum Corp. (CNPC), and China National Offshore Oil Corp. (CNOOC) - have been assessing the impact of the sanctions on their multi-billion dollar investments in Russia, sources with direct knowledge of the matter said.

"Companies will rigidly follow Beijing's foreign policy in this crisis," said an executive at a state oil company. "There's no room whatsoever for companies to take any initiatives in terms of new investment."

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