A wharf on Made Island, the starting point of the China-Myanmar crude oil and gas pipeline, awaits giant oil tankers. Courtesy: China-Myanmar crude oil and gas pipeline project

China's Ministry of Commerce (MOFCOM) has increased non-state refineries' quotas of crude oil imports to 103.83 million tons in the first batch of 2020, up 8 percent, according to the Shanghai Securities News on Thursday.

The move is in line with China's overall goal of promoting the integration of refining and petrochemical operations in the sector and driving out low-efficiency small independent refiners that operate only on a local level, said an industry expert. 

Hengli Petrochemical, a privately owned refinery in Dalian, Northeast China's Liaoning Province received 10 million tons of crude oil quota, up 150 percent compared with the first batch issued for 2019, according to documents sent by SCI99, a commodity market consultancy, to the Global Times on Thursday. 

Hengli Petrochemical began production in Dalian in December last year, and it is aiming to expand into upstream refining and the production of petrochemical products, according to a report by financial media outlet yicai.com. 

Chinese refineries are increasingly turning to petrochemicals for added values and high efficiency, an expert said. 

"In the future, large projects with advanced equipment, which have the capacity for both refining as well as petrochemical operations, will take an increasing crude oil import quota, compared with traditional refineries," Wang Luqing, an analyst from SCI99, told the Global Times on Thursday.

China National Chemical Corp (ChemChina) received only 8.52 million tons of quota for next year, compared with 9.26 million tons in the first batch in 2019, according the document sent by SCI99. 

"ChemChina's quota was cut because it didn't complete its import quota last year," Wang said, noting that small independent refineries will gradually be driven out of the industry as more facilities will shift to the integration of refining and petrochemical operations in the coming years. 

Small independent refineries received a 3 percent cut on their total quota to 75.81 million tons year-on-year, the Shanghai Securities News said. 

Global Times