China gives independent Shandong Dongming crude oil import quota

China news

The Chinese government has given independent refinery Shandong Dongming Petrochemical Group approval to import 7.5 million tonnes of crude oil a year, or 150,000 barrels per day (bpd), the state economic planner said on Tuesday.

It is the first independent plant to win crude oil quotas since the introduction of new regulations allowing more private participation in a sector long dominated by state oil giants.

The National Development & Reform Commission announced the approval on its website, after giving Dongming initial approval in late May.

Beijing introduced new rules in February that paved the way for smaller refining companies to import crude oil, hoping that more private participation would help reform its clunky and inefficient state-owned sector.

Under these rules, the applicants are required to demolish outdated refining units and have to meet clean fuel standards.

In late June, the planner gave an initial green light to another company, Panjin Beifang Asphalt Fuel Co Ltd based in northeast China, to import 7 million tonnes of crude a year, or 140,000 bpd.

The plant is partly owned by a subsidiary of state defence manufacturer Norinco Group, according to the company website.

China, the world’s second-largest oil consumer, regulates its oil imports via a quota system to ensure stable domestic supplies, with state refiner Sinopec Corp and PetroChina accounting for nearly 90 percent of the imports.

New quota winners will still need licensed state traders such as Unipec, Chinaoil and Sinochem Corp to act as import agents.