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Factbox: China to grant crude oil import quotas to Jiangsu Xinhai Petrochemical

Singapore (Platts)--29 Dec 2017 602 am EST/1102 GMT


China's independent refiner Xinhai Petrochemical in eastern Jiangsu province, is now on track to receive its first crude oil import quotas for a total of 2.3 million mt/year (46,000 b/d), China Petroleum and Chemical Industry Federation, which reviews quota applications, said on its website Friday.

The government regulates China's crude imports, but CPCIF, which is not affiliated to the government, has been appointed to review documentation and make site visits as part of the application review process for crude import quota allocations.

The quotas are subsequently approved by the National Development and Reform Commission and granted by the Ministry of Commerce.

CPCIF conducted on-site inspections over October 26-28, and is seeking public feedback by January 9 regarding the quota allocation.

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The 3 million mt/year Xinhai has acquired a 500,000 mt/year and 2 million mt/year crude distillation unit outside Jiangsu to mothball it, in order to receive the quotas.

Xinhai is a subsidiary of Dongming Petrochemical, the largest independent refinery in Shandong.

NDRC, China's top economic planner, in 2015 issued a policy allowing independent refineries to process imported crude.

The criteria for being allocated a quota to import crude requires independent refiners to get rid of smaller CDUs, with the mothballed capacity to correspond with the quota volume to be awarded.

Quotas will ultimately not exceed each individual refinery's remaining capacity.

China's independent refiners are mainly concentrated in the eastern Shandong province, though a few are located in the north and south.

They are estimated to have a total crude processing capacity of 5.436 million b/d, accounting for around 34% of China's total processing capacity of 15.882 million b/d, according to data from Platts China Oil Analytics.

China's independent refiners imported 85.37 million mt of crude in the first 11 months of 2017, up 66% year on year, according to Platts estimates.

This accounts for around 22% of China's total crude imports of 385.9 million mt in the same period, according to Platts calculations.

Before 2015, the independent refineries each had an average capacity of 40,000-50,000 b/d. But they have since revamped their plants in order to win crude import quotas and today have an average capacity of 70,000 b/d.

These refineries were not built by state-owned giants such as Sinopec, PetroChina, CNOOC and Sinochem. CNOOC and Sinochem have, however, later acquired stakes in some of these refineries.

Beijing started allowing independent refiners to process imported crude in early 2015. Prior to that, they relied on fuel oil and domestic crude for feedstock.

Crude import quotas and licences have been granted by NDRC and MOC:

(Unit: million mt/year)
Refinery
LocationCapacityQuota applied
Status
Import
DongmingShandong
7.5
7.50
Granted
Granted
North Asphalt FuelLiaoning
7.0
7.00
Granted
Granted
HongrunShandong
5.7
5.30
Granted
N/A
KenliShandong
3.0
2.52
Granted
Granted
LihuayiShandong
3.5
3.50
Granted
Granted
YatongShandong
3.5
2.76
Granted
Granted
Baota^Ningxia
7.5
4.16
Granted
Granted
Wonfull*Shandong
5.8
4.16
Granted
Granted
TianhongShandong
5.0
4.40
Granted
Granted
LuqingShandong
3.0
2.58
Granted
Granted
Chambroad**Shandong
3.5
3.31
Granted
Granted
QirunShandong
2.2
2.20
Granted
Granted
HaiyouShandong
3.5
3.20
Granted
Granted
XinyueShandong
3.2
2.40
Granted
Applying
HengyuanShandong
3.5
3.50
Granted
Applying
QingyuanShandong
5.2
4.04
Granted
Granted
XinhaiHebei
6.0
3.72
Granted
Granted
ShenchiShandong
2.6
2.52
Granted
Granted
JinchengShandong
5.9
3.00
Granted
Granted
Haike RuilinShandong
2.3
2.10
Granted
Applying
ZhonghaiShandong
2.3
1.86
Granted
Applying
FengliHenan
2.6
2.22
Granted
Applying
YanchangShaanxi
17.4
3.60
Granted
Applying
Jinao KejiHubei
5.0
2.30
Granted
Applying
LanqiaoShandong
3.5
1.80
Granted
Applying
ShengxingShandong
2.2
2.20
Granted
Applying
QichengShandong
3.5
1.60
Granted
Applying
Dongfang HualongShandong
3.0
3.00
Granted
Applying
Dalian JinyuanLiaoning
2.2
0.80
Granted
Applying
YuhuangShandong
3.0
1.44
Granted
Applying
XintaiShandong
2.2
2.00
Granted
Applying
QingyishanShandong
3.0
3.00
Granted
Applying
TOTAL
139.3
99.69

Applications to NDRC and MOFCOM for crude import quotas and licences:
RefineryLocation
Capacity
Quota applied
Status
Import
Fuyu
Shandong
2.20
1.64
Applying
Applying
Hualian
Shandong
4.00
1.70
Applying
Applying
Haike
Shandong
2.20
0.96
Applying
Applying
Xinhai
Jiangsu
3.00
2.30
Applying
Applying
TOTAL
11.40
6.60

Notes:
1. New Cap -- The latest capacity of independent refineries.
2. Quotas -- the maximum annual quotas applying for or approved by NDRC.
3. Import license -- crude import license for a refiner to import crude directly, without a third party.
* Also known as Huifeng
** Also known as Jinbo
^ Baota's quota ceiling has been lowered to 4.16 million mt/year in September by NDRC as it failed to build LNG storage by deadline.

Source: NDRC, MOFCOM

--Staff, newsdesk@spglobal.com
--Edited by Irene Tang, irene.tang@spglobal.com




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