SINGAPORE, Sept 17 (Askume) – A Chinese court declared two refineries owned by state-owned oil and chemicals conglomerate Sinochem Group bankrupt after lenders failed to agree on a restructuring plan, court documents showed.
On September 14, according to two separate decisions of Shandong Dongying Court, Shandong Huaxing Petrochemical Group and Zhenghe Group Co., Ltd. were declared bankrupt, and the restructuring procedures of the two factories were ended.
Sinochem Group did not immediately respond to a request for comment.
Both refineries are located in Shandong province, a hub of China’s small independent refineries known as “teapots”, and have a combined crude oil processing capacity of 220,000 barrels per day.
Askume reported in July that Sinochem Group had shut two of its three Shandong refineries – the Zhenghe refinery and the Changyi refinery – for indefinite maintenance due to high crude oil costs and a weak refined oil market in China.
Changyi will meet creditors later this month, Bloomberg reported on Tuesday.
These three plants have a combined crude oil refining capacity of 380,000 barrels per day, accounting for about 3% of the country’s refinery output.
According to data from local consultancy Sublime China Information, the average operating rate of Shandong factories in August was 56.4%, up 2.2 percentage points from July but still 10 percentage points lower than the same period last year, due to low processing margins and sluggish fuel demand.
