October 22, 2019 / 10:00 AM / 2 months ago

UPDATE 2-China's Hengli wins license to supply jet fuel for commercial use

(Adds spokesman’s comments)

BEIJING, Oct 22 (Reuters) - Hengli Petrochemical Co has become the first private refiner to win approval from China’s civil aviation authority to supply jet fuel for commercial use, it said on Tuesday, a first step towards selling the product overseas.

Hengli has long aimed to be China’s first private exporter of jet fuel, but the authorities had held off granting approval to private refiners to export refined oil products.

In August, the company, which submitted its fuel exports application months ago, sold its first jet fuel cargo for export through a state-owned firm, bypassing Beijing’s export quota restriction.

Civil Aviation Administration of China (CAAC) did not immediately respond to Reuters’ request seeking for comment.

Based in Dalian, a port city in the northeast province of Liaoning, Hengli launched a mega refining plant with crude oil processing capacity of 400,000 barrels per day (bpd) in late May.

The refinery is expected to produce an estimated 2.5 million tonnes of aviation fuel this year, though its designed capacity is 3.71 million tonnes, a company spokesman said.

Despite the new jet fuel license, Hengli has not been granted any government quotas to export jet fuel.

“There is still no word on the export quotas,” the spokesman said.

China has by far only allowed state refiners such as PetroChina, Sinopec Corp, China National Offshore Oil Company and China National Aviation Fuel Company. to export the fuel under a quota management system.

Reporting by Muyu Xu and Dominique Patton; Editing by Edmund Blair, Jan Harvey & Simon Cameron-Moore

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