Hengli Petrochemical has won the biggest crude oil import quota ever granted to a privately held Chinese refiner, it said in a stock exchange filing on April 19.
The National Development and Reform Commission (NDRC) approved a 20 million tonne (400,000 bpd) annual import quota for Hengli in 2018, the company said, without specifying how much of this would be available for a new 400,000 bpd refinery it is building in the northeastern port city of Dalian.
But an unnamed senior Hengli official told Reuters: “We will start using our quota this year. Depending on the size of quotas the Commerce Ministry issues us, we hope to get enough allowances for the refinery to start trial operations in October.”
For next year also, “we are confident of getting 20 million tonnes of allowances from the government,” the official added.
The plant’s two crude distillation units are designed to process 30% Saudi Arabia’s Arab Medium crude, 60% Saudi Heavy and 10% Qatar Marine, according to the official.
According to separate media reports, Hengli has also applied for quotas to export refined fuel.
When China issued a batch of oil import quotas for 2018 totalling 121.32 million tonnes (2.44 million bpd) in December 2017, state-owned ChemChina received the biggest award of 16.67 million tonnes (335,000 bpd), while North Huajin Chemical Industries followed with 7.47 million tonnes (150,000 bpd).
The new Hengli facility will be one of China’s five biggest refineries and will pose a major threat to other, typically smaller, independent refiners known as teapots.
Competition from bigger private refiners such as Hengli could force some independent refiners – which typically operate plants with capacities of less than 100,000 bpd – to close over the next few years.
Zhejiang Ronsheng is also reportedly this year set to bring into operation a newly constructed 400,000 bpd refinery and petrochemical facility in the eastern city of Zhoushan.