* Hengli Petrochemical (Dalian) Refinery was sanctioned

by US

* Hengli's Singapore arm's controlling ownership

transferred

* US has been tightening pressure on Iran oil purchases

* Hengli denies dealing with Iran

(Updates with further details and comments)

SINGAPORE, April 28 (Reuters) - China's Hengli Group,

whose refinery unit was sanctioned by the U.S., adjusted the

shareholding structure of its Singapore-based trading arm to

shift control to a Chinese local government entity, sources

familiar with the matter said.

The Singapore unit, Hengli Petrochemical International, is

now 95%-owned by Dalian Changxing International Trade, with

Hengli Petrochemical (Dalian) Refinery holding 5%, the sources

said, citing a shareholding document they received from the

firm.

Previously, the Singapore unit was fully owned by Hengli

Petrochemical (Dalian) Refinery. Dalian Changxing International

Trade is owned by a local Chinese government entity, according

to Qichacha, a corporate information database.

A Hengli spokesperson did not immediately respond to a

request for comment.

Several trading executives said they were skeptical that the

move would insulate the Singapore unit from the wariness of its

counterparties given its ownership when the U.S. measure was

unveiled on Friday.

"Banks and counterparties will make their own calls on

compliance and err on the cautious side," one source said.

Two Western-based shipbrokers and two derivatives brokers

told Reuters that they are unable to conduct deals with the

Singapore unit following the sanctions announcement.

All of the sources declined to be named given the

sensitivity of the matter.

Hengli's Singapore unit focuses mainly on derivatives

trading for crude oil and petrochemicals, with limited physical

trade of refined fuel, traders said.

On Friday, the U.S. Treasury Department unveiled sanctions

on Hengli Petrochemical (Dalian) Refinery, a unit of Hengli

Petrochemical, saying it had bought billions of

dollars worth of Iranian oil.

Shanghai-listed Hengli Petrochemical denied having trade

dealings with Iran.

The private refiner, which operates a 400,000 barrel-per-day

integrated crude-to-chemicals site in the northeastern city of

Dalian, exported on average at least 50,000 metric tons per

month of petrochemicals last year, Kpler ship-tracking data

showed.

Last year, another large Chinese refiner with a Singapore

presence, Shandong Yulong Petrochemical, saw non-Russian

suppliers, foreign customers, banks and vendors stop doing

business with it after it came under sanctions from Britain and

the European Union for dealing in Russian oil.