China’s commerce ministry granted a crude oil import licence to Zhejiang Wuchan Zhongda Petroleum, a private trading firm based in the Zhoushan free trade zone in eastern China, the ministry said in a statement on its website on Monday.

Zhejiang Wuchan Zhongda, a venture between government fund Zhousan Communications Investment Group and Wuchang Zhongda Group, is the first privately owned company to receive a crude import licence from the ministry.

The move could be an effort by the Chinese government to support the Shanghai crude futures contract that started up last year and attract institutional investors, according to Zhong Jian, chief analyst with consultancy JLC.

“The approval showed China is further opening up its crude market. More importantly, a trading firm can deliver crude oil to refineries against the Shanghai crude futures contracts,” Zhong said.

Zhejiang Wuchan Zhongda was set up in May 2018 with a registered capital of 1 billion yuan ($147.97 million), according to a filing from its parent company Wuchan Zhongda Group to the Shanghai Stock Exchange.

The company has not yet been granted a quota from the state planner, which will set the amount the trading firm can buy each year.

China first granted quotas to an independent refiner in July 2015. While the National Development and Reform Commission (NDRC) approves the qualifications, the Ministry of Commerce releases the allowances. The ministry last month issued the first batch of crude oil quotas 58 so-called “non-state trade”, including mostly these independents.

The actual allotments can be lower than the initial NDRC approvals, based on the plants’ import records.

Under rules issued in February 2015 by the NDRC, smaller refiners can gain permission to use imported crude oil if they meet certain environmental conditions, including closing old and polluting refining capacity.