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China’s Sinopec Engineering said Thursday morning that it lost a US$1.85 billion contract with Kazakhstan Petrochemical.

Shares dropped 2.1 percent in early trading Thursday morning after the announcement, the South China Morning Post said.

Kazakhstan Petrochemical is a state-owned chemical maker.

Sinopec, the refinery and chemical plant construction unit of state-owned China Petrochemical, signed a contract in June 2013 with Kazakhstan Petrochemical for engineering, procurement and construction services.

Sinopec said that negotiations failed to yield agreements on “key commercial and other aspects.”

The failed negotiations ended in a mutually agreed termination of the contract.

Kazakhstan Petrochemical hadn’t made any payments on the contract and Sinopec didn’t book any revenue.

The contract will be deducted from Sinopec’s order backlog, the South China Morning Post said.

The backlog stood at US$ 16.9 billion (¥103.98 billion) at the end of 2013.

Sinopec will announce an update backlog when it releases its interim results later this month.