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China grants rare crude import licenses to Glencore’s JV, local firm

China grants rare crude import licenses to Glencore’s JV, local firm

China’s commerce ministry granted crude oil import licences to two Zhejiang-based petroleum companies in eastern China, including a trading joint venture partly held by commodities trader Glencore.

Zhejiang Petroleum Trading Co and Zhejiang Petroleum & Chemical Co will receive the so-called “non-state” crude oil import licenses on Oct. 14 if there are no objections from the public, the ministry said on its website on Tuesday.

Zhejiang Petroleum Trading Co is a joint venture formed by Zhejiang Petroleum, a Zhejiang government-backed firm. The latter holds the majority stake of 71% while Glencore has 29%, according to provincial state media.

Zhejiang Petroleum & Chemical Co is a joint venture led by privately-owned Rongsheng Petrochemical Co.

The rare crude oil licenses are part of an experiment initiated by the local authorities in Zhoushan, a coastal city picked by Beijing as a pilot zone to build a northeast Asian marine fuel centre as well as a physical trading hub for oil and gas that rivals Singapore.

Under that scheme, Zhejiang Wuchan Zhongda Petroleum, a private trading firm based in the Zhoushan free trade zone, was the first private trader to win a similar crude import license.

Each license will be attached to an unspecified volume of crude oil import quotas, a local government official has said.

Tuesday’s Ministry of Commerce note did not give any indication on quotas.

China, the world’s largest crude oil buyer, has since 2015 partially opened its state-oil-dominated crude import market by allowing nearly 40 independent refineries to process foreign oil for the first time, managed under an import quota system.

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