As the largest overseas investment by a private Chinese company, the anticipated construction of the refinery and aromatics cracker in Brunei marks a significant milestone for the Zhejiang Hengyi Group. From its modest early stages at the lower end of the value chain, the company is now gradually diversifying and venturing into more sophisticated and capital-intensive businesses.
When it came to determining on a suitable location for the multibillion dollar project, Brunei Darussalam came out tops surpassing any other locations in the region. Under the rule of a reigning monarch for the past 600 years, the prosperous nation of Brunei Darussalam has created an environment that is economically and politically stable. Its strategic location at the heart of South East Asia makes Brunei Darussalam an ideal location for export-oriented activities. With the Oil & Gas sector contributing to over 60% of the country’s Gross Domestic Product, the Brunei government has placed an investment focus on economic diversification. Brunei’s desire to further develop its downstream sector and Zhejiang Hengyi’s aspiration to back integrate its production activities has created the perfect synergy for both parties to develop a world class refinery and integrated petrochemical complex. This project will equally enhance and strengthen the existing bilateral relationship between the two countries through both economic and cultural exchanges.
In 2011, the Zhejiang Hengyi Group obtained His Majesty’s approval to develop the project. The chosen site was Pulau Muara Besar (PMB), which is a 955ha uninhabited island in Brunei. The USD10 billion project will be split into a two phase development schedule. During the first phase, the refinery will have the capacity to refine 175,000 barrels of crude oil per day, churning out refined products to cater for domestic demand and aromatics for export to China as feedstock for Zhejiang Hengyi Group’s assets. Once completed, the first phase of the project alone is expected to contribute as much as 40% to Brunei’s Gross Domestic Product. The second phase includes plans for further expansion of the aromatics and cracker plant, providing the building blocks for the petrochemical industry.
As a green field project, Hengyi Industries has also included plans to construct jetties on the island for logistics purposes. The Brunei government will be constructing a combined-cycle power plant to cater to the electricity and steam requirement of the project and other potential investors on PMB. As part of its development plans, Hengyi Industries is facilitating a partnership between Zhejiang University and University of Brunei Darussalam to develop a twinning program for students in the petrochemical field. This program aims to produce skilled graduates and train potential employees whilst at the same time meeting the company’s long term manpower requirement. To date, it has been a fruitful journey for Hengyi Industries with some major accomplishments under its belt including the granting of a pioneer status from the Brunei government, securing part of its feedstock requirement from Brunei and obtaining regulatory approval from China. In line with the national aspiration, Hengyi Industries is looking forward to contribute even further to the development of the energy sector in Brunei Darussalam.