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China's 'teapot' province to establish refining conglomerate

Xinhua | Updated: 2017-09-02 15:30

JINAN - East China's Shandong province has approved a request to establish a refining conglomerate that will combine the country's largest independent oil refineries, known as teapots.

The founding shareholders of the new conglomerate are major teapots, including Shandong Dongming Petrochemical Group, according to a document issued Friday by Shandong Economic and Information Technology Committee.

The coastal province contains more than 70 percent of China's independent oil refineries, most of which are privately-owned.

With a revenue of over 88.6 billion yuan ($13.5 billion) last year, Shandong Dongming is China's largest teapot. Combined revenue of all the teapots in Shandong exceeds 492.5 billion yuan.

A trade group, representing major teapots in the province, sent a request to the government in July to establish the refining conglomerate.

According to the request, the individual independent refineries in Shandong could bind together under one flag to improve coordination in the face of fierce competition.

The teapots' international impact began to be felt toward the end of 2015, when the central government issued import quotas.

In the months since, the teapots have imported a huge amount of crude oil from overseas, including the Middle East, Latin America, Russia and the United States, sending shockwaves across the world energy market.

For several months of last year, the Port of Qingdao was congested with oil tankers waiting for weeks to unload crude imported by the teapots.

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