A CHINESE court has ruled that two refineries owned by state oil and chemical group Sinochem were bankrupt after creditors failed to agree on restructuring plans, according to court documents.
Shandong Huaxing Petrochemical Group and Zhenghe Group were declared bankrupt and reorganisation procedures of the two plants were ended, according to two separate rulings by Shandong’s Dongying court dated Sep 14.
Sinochem did not immediately respond to a request for comment.
The two refineries, both located in Shandong province, China’s hub for smaller independent refineries known as teapots, have combined crude oil processing capacity of 220,000 barrels per day.
Reuters reported in July that Sinochem had shut two of its three Shandong refineries – Zhenghe and Changyi – for indefinite maintenance amid high crude oil cost and weak Chinese refined fuel market.
Bloomberg reported on Tuesday that Changyi was due to meet with creditors later this month.
The three plants have combined crude refining capacity of 380,000 bpd, or roughly 3 per cent of national refinery output.
Shandong-based plants operated at an average of 56.4 per cent of their capacity in August, up 2.2 percentage points versus July but remained 10 percentage points below year-ago levels due to thin processing margins and tepid fuel demand, according to local consultancy Sublime China Information. REUTERS
