Agreement Contemplates DAQUING Purchasing up to $20 Million Worth of Products During 2008

 

NEW YORK and SHANDONG, China, Jan. 25 /Xinhua-PRNewswire-FirstCall/ -- Gulf Resources, Inc. (the "Company") (OTC Bulletin Board: GFRE - News) announced today that its wholly owned subsidiary company, ShouGuang City YuXin Chemical Company, Ltd. (SCHC), and DAQING Petrochemical General Manufacture have consummated a Letter of Intent representing the planned purchase of approximately 10,000 tons of oil refining chemical additives to be utilized by DaQing in its oil refining operations during 2008. The anticipated level of purchases would generate approximately $20 million in revenues for the Company during 2008.

 

DAQING Petrochemical Complex Office, a subsidiary of China National Petroleum Corporation (CNPC), (NYSE: PTR - News), is one of the largest Petrochemical Joint Enterprises in China. Furthermore, DAQING is the operator of the largest oil field in China and its main businesses include Petrochemical, Petrochemical Extended Processing, and Project Design and Project Construction. Additionally, the Company has been serving China National Petroleum Corp. by providing project planning, production, and technical support for petrochemical production and processing, as well as social services for employees. SCHC is a first-grade (premium) supplier to the Chinese oil industry having obtained a first level vender qualification from China National Petroleum Corporation and China Petroleum & Chemical Corporation (SINOPEC). SCHC has focused its development efforts on various customized products specifically to address needs of the DaQing Oil Field and is a trusted contract supplier of DaQing Oil Field and DAQING Petrochemical General Manufacture. The Letter of Intent covers a number of products that SCHC will supply, including petrochemical additives, demulsifiers, and a cetane improver for diesel fuel, with an aggregate estimated production yield of 10,000 metric tons, which if shipped during 2008 would equate to approximately $20 million in revenue.

 

Mr. Ming Yang, the Chief Executive Officer of Gulf Resources, Inc., commented "The consummation of this Letter of Intent between our subsidiary, YuXin Chemical Company, Ltd. and DAQING Petrochemical General Manufacture, provides further confirmation that our Company's products have achieved acceptance by large-scale Petrochemical enterprises in China. In addition, we have successfully established Gulf Resources as a reputable brand, supported by a strong R&D team, a broad portfolio of products and core production capabilities, in addition to a growing pipeline of new products focused on large-scale oil fields both domestically and internationally. We believe these relationships demonstrate both our position in the market and our ability to significantly grow our business in 2008 and beyond. The revenues associated with this Letter of Intent were a component of our previously issued financial guidance for calendar 2008."