Hengyi refinery 78% complete, to be operational by year’s end

The first phase of Hengyi Industries’ oil refinery and petrochemical plant at Pulau Muara Besar (PMB) will be operational by the end of 2019 and is expected to contribute USD 1.33 billion to Brunei’s GDP in its first year, according to the Minister of Energy, Manpower and Industry.

Dato Seri Setia Dr. Awg Hj Mat Suny Hj Mohd Hussein said the USD 3.4 billion refinery was 78% complete in his welcoming remarks to HRH Prince Haji Al-Muhtadee Billah the Crown Prince and Senior Minister at the Prime Minister’s Office during his visit to PMB earlier this morning.

“It (the refinery) will create 1,665 jobs directly, with at least 50% of Bruneians at the beginning, which will increase to 90% in the future,” he said. “At peak operations, the plant (first phase) can process 175,000 barrels of crude oil a day (eight million metric tonnes annually); 12,000 tonnes which will be for local needs.”

The minister added that Hengyi has awarded 82 contracts to local companies for services including construction, chemical supplies, logistics and cleaning.

Hengyi is the first tenant on PMB, with its first phase taking up 276 hectares on the 955-hectare industrial park. Director of General Affairs Li Peng said that Hengyi plans to move forward with its second phase by 2022 – worth another USD 10 billion in investment – after feasibility studies have returned positive.

Watch: Inside Hengyi’s sprawling refinery at PMB

According to Hengyi’s website, the first phase will generate USD 7 billion to USD 10 billion in sales annually, while the second phase is expected to further boost crude oil processing capability by 14 million metric tonnes annually. Cumulatively, both phases are expected to hire 4,000 directly and create “tens of thousands” of indirect job opportunities through spin-off or service industries.

Li added that they would also be importing oil from overseas to maximize the plant’s capacity. The refining of crude oil through the plant ensures Brunei has self-sufficiency in petroleum products – including gasoline and diesel – for local consumption, the surplus of which will be exported.

Meanwhile the majority of the downstream chemical products, used primarily as raw material for industrial processes and manufacturing, will be exported to China.

The project’s downstream output for the first phase reportedly includes 1.5 million tonnes of paraxylene and 500,000 tonnes of benzene annually, projected to increase by 1.5 million tonnes of paraxylene and ethylene annually under phase two.

Paraxylene is the main ingredient for purified terephthalic acid (PTA) which is used to create polyester fiber (PET). Ethylene glycol is also an important precursor for PET. Both PTA and PET are highly demanded industrial chemicals to make clothing and plastic materials – and meet Hengyi’s aspirations of being the world’s number one polyester manufacturer.

Hengyi Industries is a joint venture with China’s Zheijiang Hengyi Petrochemical owning 70% and Damai Holdings – a subsidiary under Brunei’s Ministry of Finance and Economy’s Strategic Development Capital Fund – owning 30%. Zheijiang Hengyi’s investment into PMB is the largest foreign direct investment into Brunei from China.

HRH began his working visit this morning by inspecting the road conditions along Jalan Serasa and visiting the Serasa Casting Yard, where he viewed the 578th and final girder for the Temburong bridge, which is slated for completion by the year’s end.

During his visit to PMB, HRH also met with Bruneian staff working on site, spending lunch and performing Zuhur prayers with them at the island’s prayer hall.

Watch: DPMM inspects final girder for Temburong bridge