Chinese oil and gas company Sinopec says it is striving to lower its petrochemical production costs and optimize its product mix in order to stave off competition from the U.S., according to Reuters.

The shale gas boom in the U.S. has led to significantly lower feedstock costs, which has fueled optimism and encouraged project planning there.

Sinopec Vice Chairman and President Wang Tianpu told reporters on Monday that the company is looking to shift away from using oil-based naphtha as the main feedstock in favor of cheaper ethane.

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The Beijing-based oil giant, which is already suffering from competition with the Middle East, hopes that using ethane as a feedstock will help lower its costs and improve its competitiveness.

"U.S. shale gas contains lots of components that can help petrochemical producers significantly lower costs. This is something that we did not expect before," Tianpu said.

On Sunday, Sinopec reported a 12.8 percent fall in 2012 net profit due to a drop in revenue from its upstream and chemical businesses, Reuters reported.