On January 18th, 2017, MoC released the 1st batch of crude oil import volume 68.81 million mt for non-sated trade. 

    On January 18th, 2017, China the first batch of crude oil import volume for non-sated trade which received much concern and controversial was issued by Ministry of Commerce with 68.81 million mt, and 45.64 million mt was issued to 19 independent refineries, which accounted for 62% of the quota of imported crude oil that the independent refineries acquired in 2016.

    Compared to the quotas in the 2016, all the teapots suffered declines. In addition, the first batch of crude oil import volume included 12.03 million mt of ChemChina and 7.21 million mt of North Huajin Chemical Industries Group, coupled with 3.93 million mt of Sinopec Zhanjiang Dongxing, Fujian Refining & Petrochemical Company and other non-independent refineries.

    M&A events attract the market focus in 2017.

    1.In January, 2017, China Overseas Holding Group Co., Ltd. and Shandong Rizhao Shtar Technology Petrochemical Co., Ltd. completed the cooperation on equity. According to JLC, 70% of the shares were purchased by China Overseas Holding Group and Rizhao Shtar Technology Petrochemical retained 20% of the shares, and the rest of the shares were held by Hiking Group. On November 11th, 2017 China Overseas Energy Technology (former Rizhao Shtar Technology) restarted CDU finally.

    2. On February 21st, Zhonggu Petrochemical held a grand business planning meeting in Sanya,  and Zhonggu Petrochemical said publicly that it took full control of Zhuhai Baota Petrochemical. It had registered and established Zhonggu Petrochemical (Zhuhai) Company in Hengqin of Zhuhai on November 3rd, 2016, marking the energy sector of Zhonggu Qilong starts sailing.

    3. In March, 2017 Shandong Tianhong New Energy’ application for constructing new CCR units has been approved and Decheng Holding Industrial Co., Ltd normally purchased Shandong Tianhong New Energy, but the details on the share ownership distribution of the acquisition are undetermined.

    4. Qilu Transportation Service Development Co. Ltd. acquired 40% share holdings and became the chief shareholder of Dongying Lianhe Petrochemical by injecting investment. The other 60% shares are still held by Shandong Wantong Petrochemical, Shtar Science & Technology, Hualian Petrochemical and Dongying City Petroleum Chemical Industry Group.

    5. On June 8th, Sinomec and Shandong Shangneng Group signed the cooperation agreement, indicating another teapot had the background of SOE. Shandong Shangneng would further optimize the operation structure to achieve the promotion of group business and rapid development by this cooperation, and this is also the third cooperation for Sinomec after holding Shandong Shengxing and building Tianjin National Energy.

    The rumor ran through 2017 that government would impose consumption tax on mixed aromatics, LCO and cutback bitumen.

    At the end of March 2017, it rumored that the relevant state departments will impose consumption tax on imported mixed aromatics, LCO and cutback bitumen, and then the importers and some independent refineries were waiting to see and even stopped importing. However, till the end of this year, there were no actual documents from government, and the importing market is still affected by the market with gloomy future.

    Since May 5th, 2017, NDRC would stop receiving the application documents of using imported crude oil of the enterprises processing crude oil.

    On April 27th, the National Development and Reform Commission released the notice that since May 5th, 2017, NDRC would stop receiving the application documents of using imported crude oil of the enterprises processing crude oil, which indicated the independent refineries’ channels to acquired the imported quotas of crude oil that lasted for three years were blocked temporarily. Of course, NDRC would continue the verification and evaluation works on the enterprises that submit the complete applications before May 4th. According to JLC, by the end of December 2017, there are still 8-10 independent refineries are applying for the quotas, totaling 14 million mt of usage quotas, so the whole approval progress of NDRC would postpone in 2018.

    On June 20th, 2017, Ministry of Commerce released the 2nd batch of crude oil imported quota.

    There were 32 teapots which acquired a total imported quota of 22.92 million mt, accounting for only 33% of the first batch, and the total amount of these two batches were 91.73 million mt, which were far more than 87.6 million mt released at the end of 2016 for the allowed amount in 2017. This also verified the additional adjustment principles shown in the official documents released at the end of 2016. In addition, in this batch, 19 teapots (excluding ChemChina) were granted to use imported crude oil of 15.77 million mt, accounting for 68.8% of the total quotas which gives the teapots an absolute advantage in the domestic refining market.

    On June 29th, Dongjiakou Port (in Qingdao Port)-Weifang-Central & North Shandong oil pipeline Phase I was completed and on August 22nd it was put into operation, marking the revolution of independent refineries’ crude oil transportation.

    On June 29th, the high-anticipated Dongjiakou Port (in Qingdao Port)-Weifang-Central & North Shandong oil pipeline Phase I with length of 236km construction has been finished after more than 9 months of diligent working.

    Dongjiakou-Weifang pipeline officially started transporting crude since August 22nd morning. The pipeline will transport Luqing Petrochemical’ previous crude stock first, then to transport one ship of Lijin Petrochemical’s OMAN crude with 285,000 mt. The transportation of Dongjiakou-Weifang-central Shandong pipeline and North Shandong pipeline were putting into operation, which is very significant in lowering independent refineries’ transportation expenses. This also marks that Qingdao Port has realized the full logistics of "door to door" oil transportation. The green oil transportation starts from Shandong.