A consortium of independent Chinese oil refineries trying to get out from under the shadow of powerful state-owned rivals has laid out plans for co-ordinated international crude sourcing, and exports of diesel and other oil products.
Independent refineries, known as “teapots”, account for about a fifth of China’s refining capacity and have been gaining market share since Beijing granted them crude import licences. But their eagerness to capitalise on the new clearance resulted in chaotic buying in the spring that led to severe port congestion and high storage charges in China’s northern province of Shandong.
The new consortium opens the door for more co-ordinated purchases and could help the teapots diversify their crude imports and lower their sourcing costs. It is led by Pacific Commerce, the Singapore-registered trading arm of Dongming Petrochemical, one of the largest of the teapots and which will represent the 16-strong group in international crude sourcing and product sales.