Established on 9 April 2004, China Aviation Oil Xinyuan Petrochemicals Co. Ltd. ("Xinyuan") was jointly set up by China Aviation Oil (Singapore) Corporation Ltd ("CAO"), Shenzhen Juzhengyuan Petrochemical Co. Ltd. ("Juzhengyuan") and China Aviation Oil Holding Company (now renamed China National Aviation Fuel Group Corporation, "CNAF") with a total registered capital of RMB 50 million.

Xinyuan provides storage services and trades jet fuel and other oil products. Xinyuan owns the Shuidong storage tank farm, near Shuidong pier in the city of Maoming in Guangdong province, including surrounding land covering 76,732 square meters. There are six tanks with a capacity of 5,000 cubic metres ("CBM") each and two tanks of 10,000 CBM each. Total current total storage capacity is 50,000 CBM and the facilities are built to store various types of oil products.

CAO signed a Share Sale and Purchase Agreement on 29 January 2007 to sell 41% of its 80% stake in Xinyuan to Juzhengyuan, for a total consideration of RMB 20.5 million. Upon completion of the sale, the Company shall hold 39%, whilst Juzhengyuan will hold 60% and CNAF will continue to hold 1% stake in Xinyuan. Xinyuan shall thereafter cease to be a subsidiary of CAO and shall become an associated company of CAO.

CAO believes that development potentials for Xinyuan would be more fully realised with Juzhengyuan taking a controlling stake in Xinyuan.