Singapore — China's Ministry of Commerce said Nov. 2 that qualified refineries and trading companies will be able to apply for up to 243 million mt (4.86 million b/d) of crude oil import quotas for 2021 by Nov. 15.
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The 2021 import quota ceiling volume of 243 million mt is 41 million mt, or 20.3%, higher than the 202 million mt set for 2020 and 2019, according to S&P Global Platts calculations based on ministry statements.
Refinery sources said the incremental volume of 41 million mt should cover the feedstock requirements for the new 20 million mt/year phase 2 project of the Zhejiang Petroleum & Chemical in Zhejiang province, as well as the need of the new 16 million mt/year Shenghong Petrochemical in Jiangsu province, both in eastern China.
The Phase 2 of the ZPC project aims to start up by end 2020, while Shenghong Petrochemical is slated to come on stream by end-2021.
In addition, the ceiling volume could also include those for trading companies that have been approved with an import license, according to trading sources.
Xiamen Tongxin Trading Company, Xiamen Xiangyu Logistic Group, Fujian Minhai Energy International Trading Company, were awarded import licenses by the ministry in mid-2020.
So far in 2020, the ministry has allocated a total 184.55 million mt of quotas to trading companies and refiners. Of this, 179.4 million mt was allocated to 44 qualified independent refineries, making up more than 97% of the total quota permit to non state-run companies.
The ministry might increase quotas if oil companies need to import more crude based on their increased capacity. The ministry will also allow quota holders to make downward adjustments, in which case the remaining quotas will be returned to the ministry by Sept. 1 during the corresponding year.
The first batch of quotas for 2021 will be awarded by Dec. 31, 2020, and the rest will be allocated in the following months, depending on market conditions.
However, the ministry will not allocate 2021 crude import quotas to those who have not imported crude over the past two years, according to the ministry statement released Nov. 2.
In China, refineries built and operated by state-owned companies -- Sinopec, PetroChina, CNOOC and Sinochem -- do not need quotas to import crude oil.
However, all other refineries, including independent ones and those owned and operated by state-owned companies like ChemChina and Norinco, require quotas to crack imported crude oil.
Crude imports quotas for non state-run companies (Unit: million mt)
*Imports by independent refineries as of end-Sep 2020.
Source: China's Ministry of Commerce (MOFCOM)