China Petroleum and Chemical Corp. (SNP), better known as Sinopec, is quickly chipping away at PetroChina Co.'s (PTR) once dominant position in China's bunker fuel market as it expands to more ports and acquires more infrastructure.

Bonded sales of bunker fuel--or sales of the fuel to international ships--have reached 200,000 metric tons a month, up from 10,000 tons a month when sales first started in July 2006, the company said in a statement Thursday. Sinopec's bonded sales last year averaged only 30,000 tons a month, according to data provided by C1 Energy.

China 's is the fastest-growing marine fuel market in Asia , and its ports see more shipping traffic than any other country's in the region. However, it usually is a second choice for refueling by foreign vessels, which prefer to buy cheaper and more standardized fuel at ports in more competitive markets such as Japan , Hong Kong , South Korea and Singapore .

Sinopec's growing market share comes at the expense of China Marine Bunker (PetroChina) Co. , better known as Chimbusco, which held a monopoly on bunker fuel sales in China for more than 30 years. In 2006, the Chinese government issued licenses to four new players, including Sinopec, to enter the business.

Although Chimbusco is still the leading supplier, with average bonded sales of about 430,000 tons a month, Sinopec is closing in on the second-largest supplier, Brightoil Petroleum (Holdings) Ltd., which had average bonded sales last year of 180,000 tons a month.

China 's bonded bunker fuel sales are expected to reach 11.41 million tons in 2011, up 33% from 8.55 million tons in 2010, according to C1 Energy.

Separately, Sinopec said domestic sales of bunker fuel also reached 200,000 tons, bringing combined sales to 400,000 tons a month.

As part of its expansion, Sinopec now has 152 million cubic meters, or about 150,000 tons, of onshore storage for bunker fuel, and owns a fleet of more than 50 oil tankers used for fuel delivery, the company said.

Over the past five years, Sinopec has expanded sales of bunker fuel to 21 ports across China and now reaches about 50% of the total market, it said.

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