Chinese private-sector refiner Hengyi has committed to a second-phase expansion that will more than double capacity at its 175,000 b/d Brunei refinery and petrochemical complex.
The expansion will add another 280,000 b/d of refining capacity, taking the project's total crude processing capacity to 455,000 b/d, as well as 1.65mn t/yr of ethylene, 2mn t/yr of paraxylene (PX), 2.5mn t/yr of purified terephthalic acid (PTA) and 1mn t/yr of polyethylene terephthalate (PET) capacity.
Construction will take three years, Hengyi said, without indicating when it planned to start work on the expansion. The second phase will require an estimated investment of $13.6bn, which will be financed internally and through bank loans and other funding sources.
The Brunei refinery came on line in November last year. The project is geared towards producing feedstock for Hengyi's Chinese petrochemical plants and selling oil products to Brunei and nearby countries. The refinery is designed to process locally-produced Brunei crude and imports of light and medium grades.
The expansion risks adding to products oversupply in Asia-Pacific, which is threatening the viability of refiners elsewhere in the region. The second phase's planned gasoline and diesel yields will be 2.55mn t/yr (59,000 b/d) and 1.94mn t/yr (40,000 b/d) respectively. The expansion will also add 1.84mn t/yr (40,000 b/d) of jet fuel and 190,000 t/yr of LPG production.
Brunei's oil product exports surged after the refinery's start-up last year, prompting Indonesia – Asia-Pacific's largest gasoline buyer – to include Brunei as one of its loading port options.
Hengyi holds a 70pc stake in the Brunei refinery, with the Brunei state owning the remaining 30pc. The refinery is eligible for an 11-year corporate income tax exemption and duty-free imports of equipment and raw materials, in line with projects that meet Brunei's "pioneer enterprise" conditions.
Hengyi's listed arm, which is responsible for the Brunei project, made a profit of Yn1.9bn ($28mn) in the first half of 2020, up by 49pc from a year. The Brunei refinery contributed Yn564mn to its profit during the period. Hengyi expects the second phase to expand the Brunei refinery's profits by $1.7bn/yr after it comes on line.
The refinery's existing units include a 2.2mn t/yr hydrocracker, 2.35mn t/yr light hydrocarbon reclamation unit, 2.2mn t/yr diesel hydrogenation unit, 1.3mn t/yr jet-kerosine hydrogenation unit, 1mn t/yr coker, 600,000 t/yr gas fraction unit, 1.1mn t/yr isomerisation unit, 120,000 t/yr sulphur recovery unit and plants capable of producing up to 1.5mn t/yr of PX and 500,000 t/yr of benzene.
