Jincheng Petrochemical, a newly restructured independent refiner controlled by the Liaoning provincial government in northeastern China, is seeking crude oil import quotas for its three plants, according to four sources with knowledge of the matter.
Jincheng Petrochemical has applied to Beijing for quotas to import 15 million metric tons of crude per year, which equates to 300,000 barrels per day (bpd), or about 3% of the shipments the world’s largest crude importer, China, brings in.
Jincheng Petrochemical was formed by the merger of three refineries in Liaoning province previously owned by private refiner Bora Group and Panjin Haoye Chemical Co, both of which were found to have evaded fuel taxes in a government investigation in 2021. The new company is now controlled by the Liaoning provincial government.
If the quotas are approved, the additional volumes Jincheng purchases could increase the amount of oil that China buys from Russia, Iran, or Venezuela, which make up much of the crude consumed by independent refiners such as Jincheng, according to trade sources.
Previously, state refiner Sinopec Corp was assigned as the oil supplier to the plants now run by Jincheng, which have a combined processing capacity of 400,000 bpd, after the previous owners lost their import quotas following the 2021 investigation. Sinopec’s imports are not subject to quota management.
The regulatory scrutiny in 2021 quashed some imports, leading to the first annual decline in 20 years in shipments to China that year. Several other independent refiners were also stripped of import quotas following that probe.