MOSCOW (MRC) -- Hengli Petrochemical wants to be China’s first private exporter of jet fuel, a Hengli spokesman and other company sources said, but the move against the dominance of state oil companies requires licensing and approvals that will be hard to come by, said Rueters.
Hengli, initially a petrochemicals maker, is ramping up a 400,000 barrels-per-day (bpd) oil refinery in the port city of Dalian to full capacity after a December startup.
It expects to churn out 5 million tonnes of refined products (about 40 million barrels) by year-end, including up to 3 million tonnes of aviation fuel, two company sources said, going after the fuel for which demand growth is fastest.
Hengli, though, has to first get its jet fuel certified by aviation authorities and then win export allowances before shipping any supplies abroad. Without those clearances, unless it can win the right to sell aviation fuel domestically, it would be forced to adjust its output to produce more diesel at the cost of the higher-value product.
“The company is hopeful of getting the export quotas ... but we foresee barriers in winning the domestic licensing,” said a senior Hengli source.
An executive with another private refiner based in Shandong, a hub for smaller independent operators, said: “Few independent plants are making jet fuel because it’s a monopolized market and needs certifications that are hard to obtain.”
Hengli’s new plant and a similar-sized private refinery that Zhejiang Petrochemical started trials on this month are adding to China’s swelling fuel surplus as the nation’s refinery throughput outpaces demand growth.
To find a profitable market, Hengli has applied for 3 million tonnes in export quotas for its jet fuel output this year, a Hengli spokesman said, without giving a timeline on when it may win the permits.
The Ministry of Commerce and the National Development & Reform Commission, who are together responsible for assigning export quotas, did not respond to requests for comment.
Winning those quotas would make Hengli China’s first private refiner to export aviation fuel, but before it can get to that stage, it first has to get an airworthiness certification for its fuel from the Civil Aviation Administration of China (CAAC).
Hengli has already applied to the CAAC for the certification and expects to get it in July when the refinery production stabilizes, the company spokesman said.
A CAAC spokeswoman confirmed CAAC has received Hengli’s application, but gave no information on approval or timing.
As MRC informed earlier, INVISTA’s technology and licensing group, INVISTA Performance Technologies (IPT), and Hengli Petrochemical (Dalian) Co.,Ltd. (Hengli) have reached an agreement to license INVISTA’s latest purified terephthalic acid (PTA) process technology for Hengli’s fourth PTA line.
MRC