China Further Breaks Oil Monopoly: Shandong Dongming Granted Import License

Flashback to August 2014: China Begins Breaking the Oil Monopoly

China's Guanghui Energy has received a crude oil import licence from the government, becoming the first non state-owned enterprise to be granted the sought after licence as Beijing gradually loosens its grip on the oil market.

Now what was the largest teapot refinery as of 2012, Shandong Dongming, has won an import license: 能源垄断松动：山东地炼首获进口原油使用权

Bloomberg in February 2015: China ‘Teapot’ Refineries May Access Imported Oil Under New Rule

China will allow more oil refiners to process imported crude, opening the door for small, independent plants known as teapots to use an alternative feedstock.

Refiners investing in overseas oil exploration or capable of advanced processing and pollution-treatment technology will have priority to use imported crude, the National Development and Reform Commission said in a Feb. 9 statement released on its website on Monday. To be eligible, plants must also have at least one crude distillation unit with a designed capacity of more than 2 million metric tons a year, it said.

The Barrel: Should China’s state-owned giants fear the teapot refineries?

China’s intention to relax hitherto strict crude import rules may be causing alarm within its state-owned refiners.

The country’s small but resilient independent teapot refiners have long complained that restrictions on crude import rights have forced them to rely on alternative feedstocks — primarily imported straight-run fuel oil — and, as a result, hampered their margins and crimped processing volumes.

So the announcement of guidelines for new crude oil import quotes last month by the National Development and Reform Commission was received favorably by the refiners.

Will the ability to officially import crude revive teapot refiners’ fortunes?