GreenergyDaily
Dec. 8, 2025
A Chinese refinery operator whose main business was disrupted when it was sanctioned by Washington in May for buying Iranian oil is pressing ahead with a $3.6 billion petrochemicals expansion project, Reuters reported, citing two people familiar with the plan.
The construction taking place at the Xinhai Chemical site in north China's Cangzhou city underscores how the country's independent refiners, Iran's largest oil customers, manage to maintain their business despite falling foul of expanding Western blacklists aimed at curtailing oil revenues to governments including Tehran and Moscow.
Early last year, parent firm Hebei Xinhai Holdings Group announced a 50 billion yuan ($7.08 billion) plan to transform the refiner into a chemical producer, state media reported.
About half of that investment is earmarked for the first phase of the petrochemicals project, which is slated for completion by end-2026, said a person with direct knowledge of the matter, declining to be identified due to the sensitivity of the issue.
In May, Xinhai Chemical, the unit that operates a 120,000 barrels-per-day refinery, and several Chinese oil terminal operators were designated by the U.S. Treasury for buying hundreds of million dollars worth of Iranian oil under efforts by President Donald Trump's administration to pressure Tehran to curb its nuclear activities.
The sanctions initially caused disruptions for Xinhai Chemical, the main business unit of Xinhai Holdings, including suspension of services from state banks.
However, the refinery soon found workarounds by operating through entities segregated from the blacklisted firm and continues importing Iranian oil, said one of the people familiar with the expansion and a third source.
"The company has recovered from the initial, brief disruptions," one of them said.
The expansion is being run under Hebei Zhixiang Chemical New Materials, which is separate from Xinhai Chemical, one of the sources said. Reuters was unable to find business registration details for the company.
