MoneyNewsPoliticsTop News

China allowed the import of petroleum products from a private refinery

CHINA (OBSERVATORY) –┬áThe Chinese authorities have approved a quota for oil imports for the Hengli Group refinery, whose capacity is 400,000 barrels per day, Reuters reports.

The petrochemical unit of Hengli Petrochemical confirmed the fact that the National Development and Reform Commission issued a corresponding permit.

Trial operation of the refinery is planned to be launched in October.

The source in Hengli said that the company will start using the quota in 2018, the company expects that the volume will be enough to start the refinery in the test mode in October.

The quota is 20 million tons per year (400 thousand barrels per day), this is the largest quota for private refiners in China. The proportion of its allocation should be determined by the Ministry of Commerce of the PRC.

The source added that the company is confident that they will receive permission to import from the authorities, which should reach 20 million tons in 2019.

Hengli plant is located in the northeast of China, it should enter the top five of the country’s largest refineries. Another private petrochemical producer (Zhejiang Ronsheng Group) is expected to launch a plant of similar capacity later this year.

Analysts believe that the additional capacity of production of petroleum products in China can hit a small refinery, the capacity of which does not exceed 100 thousand barrels per day. According to Harry Liu of IHS Markit, in the next two years some mini-factories may be closed, as they will not withstand competition.