(April 28): China’s Hengli Group Co has changed the ownership structure of its Singapore-based oil trading arm after the US sanctioned its refining unit, according to people with knowledge of the matter.
The change means the Singapore entity, Hengli Petrochemical International Pte, is now only 5%-owned by Hengli Petrochemical (Dalian) Refinery Co, which was sanctioned by the US Treasury Department’s Office of Foreign Assets Control on Friday over alleged links to Iran, the people said, asking not to be named due to the sensitivity of the matter.
The Singapore unit is now no longer majority-owned by an entity targeted by the US, and thus shouldn’t be treated as being sanctioned by association, the people said, citing a notice from Hengli to its clients.
Hengli is the second-largest private refiner in China, operating a modern oil-processing and chemical complex in Liaoning province. Ofac cited oil purchases from Iran when sanctioning Hengli, although the company has denied the claim. The US also sanctioned shipping companies and tankers involved in the Iran oil trade, ramping up pressure on the Islamic Republic as the war in the Middle East drags on.
The Singapore unit is responsible for the trading and sourcing of crude feedstock for Hengli’s China-based oil-processing plants among other businesses.
Before the sanctions, Hengli’s Dalian unit held complete ownership of the Singapore entity. The remaining 95% of the company is now owned by Dalian Changxing International Trade Co Ltd, which is a Chinese government-linked trading house, according to the people.
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Representatives for Hengli didn’t immediately respond to a request for comment.
Uploaded by Magessan Varatharaja
