China will allow more oil refiners to process imported crude, opening the door for small, independent plants known as teapots to use an alternative feedstock.

Refiners investing in overseas oil exploration or capable of advanced processing and pollution-treatmenttechnology will have priority to use imported crude, the National Development and Reform Commission said in a statement released on its website on Feb. 16. 

To be eligible, plants must also have at least one crude distillation unit with a designed capacity of more than 2 million metric tpy, it said.

China, the world’s second-largest oil consumer, is widening access to crude supplies amid a global glut that’s driven benchmark prices to the lowest in almost six years. Teapot operators, which process mainly fuel oil, have for years sought to expand their options because it’s more profitable to process crude. China National Chemical Corp., or ChemChina, in November 2012 became the first to be allowed to import as much as 10 million tons a year to supply its teapot plants.

“This document provides hope for teapot refineries to process imported crude by listing all the requirements in detail,” said Amy Sun, an analyst at ICIS China, a Shanghai-based commodities researcher. “It’s now up to the refiners themselves to evaluate whether they want to abide by those rules.”

Teapot plants, located mainly in the eastern province of Shandong, typically process fuel oil into gasoline and diesel. State oil companies dominate crude production and imports in China, which trails only the U.S. globally in oil demand.

China’s teapot refineries will have a total oil-processing capacity of almost 220 million tons this year, or about 4.4 MMbpd, Lu Xiaoxu, another ICIS analyst, said in November. Shandong Dongming Petrochemical Co., the country’s largest independent operator by capacity, and Sinochem Hongrun Petrochemical Co. are expected to receive crude-import quotas this year, he said.

“This is a breakthrough for us teapot refineries and paves the way for getting crude-import quotas as early as March,” said a Shandong Dongming official, asking not to be identified because of company policy.

China has set crude-import quotas for non-state companies at 37.6 million tons for 2015, the Commerce Ministry said in November. That’s an increase of more than 8 million tons over last year, signaling that other refiners may be granted allowances under the new policy, said Sun at ICIS.

To obtain the import quotas, refiners must shut crude units below the 2 million-ton capacity requirement, according to the NDRC document. Their allocations will correspond to the inefficient units that’s closed or the capacity of natural gas reserve facilities that they construct, it showed.