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China grants independent refiners licenses to import crude oil
[BEIJING] China's Ministry of Commerce said on Monday it will grant licenses to two independent refineries to directly import crude oil, shortly after the companies won import quotas, as Beijing continues to open up the tightly state-controlled sector.
Beijing has already widened the pool of companies to which it will award quotas for imported crude, starting early this year to boost private participation in the oil trade ahead of a planned launch of a crude oil futures contract.
Most quota winners still have to nominate a state-affiliated trading company as agent for any shipments.
But Shandong Dongming Petrochemical Group and Panjin Beifang Asphalt Fuel Co have now been approved for licenses to import crude on ther own, according to a short statement posted on the ministry's website.
The approval came just two weeks after the ministry said companies that meet certain environmental and capacity requirements could apply for import licenses.
Under those requirements, applicants should also have a team of five experienced traders as well as bank credit worth a minimum of US$1 billion at a provincial-level bank, criteria that traders said could keep out some applicants.
Domestic independent oil refineries, who act as China's main swing producers of refined products, have long been deprived of crude oil as feedstock, forcing them to import lower-quality fuel oil to turn out gasoline and diesel.
Beijing has so far granted import quotas for 715,800 barrels per day of crude to refiners outside the country's top three energy firms, roughly 11 percent of the total crude imports of the world's second-largest oil consumer.