Beijing, China – In a preemptive move to counter mounting financial pressures, Chinese conglomerate Hengli has significantly altered the ownership structure of its Singapore trading unit. This follows the inclusion of its refining arm on the US sanctions list. These actions are part of the Chinese giant’s efforts to safeguard its international operations and ensure the continuity of its trade flows, shielding them from Washington’s restrictions.
Restructuring shares and changing owners
Reuters, citing informed sources, reported that Singapore-based Hengli Oilchem International Petrochemical Company has undergone a rapid ownership restructuring.
Under the new structure, Dalian Changxing International Trading now holds a 95% stake in the Singaporean unit.
Conversely, Dalian Hengli Petrochemical’s stake in this unit has been reduced to just 5%. Previously, the Singaporean unit was wholly owned by Dalian Refinery. This legal and technical measure aims to sever the direct link between the offshore trading unit and the refinery, which was directly sanctioned.
US accusations, Chinese denials
Last Friday, the US Treasury Department imposed stringent sanctions on the Hengli refinery in Dalian, accusing it of facilitating and financing the purchase of billions of dollars’ worth of Iranian oil. Washington considers this a violation of its sanctions policy against Tehran.
For its part, the Hengli Group categorically denied these accusations, asserting in an official statement that it adheres to international law and has never dealt with Iran.
The strategic importance of the external unit
The significance of this move lies in the pivotal role played by the Dalian refinery, which has a production capacity of 400,000 barrels per day. According to data from Kpler, a platform specializing in tracking energy shipments, the refinery exported at least 50,000 tons of petrochemical products per month last year.
The overseas units, particularly in Singapore, a global energy trading hub, serve as the lifeline for Chinese exports to reach global markets. Therefore, the ownership restructuring reflects Hengli’s desire to insulate its international business activities from the ongoing conflict between Washington and Tehran. It also aims to ensure that its assets are not frozen or its banking transactions abroad are not obstructed.
