The oil company signed an agreement with Tibet Highland Natural Water Ltd on Thursday toestablish a glacier water brand and use Sinopec's retailing network to sell it nationwide.

Sinopec says the bottled water has been sent to 11 provinces and cities, including Beijing andShanghai. Its gas service stores will start selling the brand on Aug 15.

Zhang said the cooperation will be a win-win situation. The Tibet water company, established in2010, has advanced technology and experience of the bottled water industry, while Sinopec hasmore than 30,000 gas stations and 23,000 stores visited by 80 million regular customersannually.

Sinopec started its non-fuel businesses, featuring convenience stores, dining and auto services,in 2008. The company's non-fuel revenue totaled 13.3 billion yuan ($2.16 billion) in 2013 and itexpects the figure to reach 15 billion yuan this year.

Sinopec has been a pioneer of mixed-ownership reform as the government encourages moreprivate investment in State-owned enterprises, said Han Xiaoping, chief information officer ofChina Energy Net Consulting Co Ltd.

In 2010, Sinopec's subsidiary in the Ningxia Hui autonomous region in northwestern Chinaentered into the medlar or Chinese wolfberry industry by establishing a new brand and selling it atmore than 10,000 gas service stations.

Last week, Sinopec signed a strategic cooperation framework with Taiwan Ruentex Group todevelop non-oil businesses, including convenience stores, e-commerce and financial services. Indeveloped countries, up to 50 percent of gas stations' profit comes from non-fuel products. Morethan 95 percent of gas stations in the United States have convenience stores.

Sinopec and other domestic gas retailing companies are facing increasing competition fromforeign counterparts. Multinational oil company Royal Dutch Shell Plc owns around 1,100 servicestations in China.