Hengyuan: RM700m to upgrade PD refinery

PETALING JAYA: Hengyuan Refining Co Bhd (HRC), formerly known as Shell Refining Co (Federation of Malaya) Bhd, has approved investments totalling US$160 million (about RM700 million) for two major projects to upgrade its refining complex in Port Dickson, Negri Sembilan.

“The board’s approval to invest in these critical upgrades is a major milestone for HRC and ensures our Port Dickson refinery’s long-term future and sustainable growth. It also demonstrates our continued commitment to deliver high quality fuels to customers,” managing director and executive director Maarten Stals said in a statement last Friday.

The first project, estimated to cost US$135 million (RM590 million), will allow the refinery to economically produce Euro 4M Mogas (motor vehicle gas).

The plant will use a combination of hydro-processing and liquidliquid extraction technology which has been applied successfully by licensors in various operating plants, including Shandong Hengyuan Petrochemical Co Ltd in its Shandong-based refinery and chemical complex that produces Euro 6 grade Mogas.

The Euro 4M Mogas complex will have a capacity of 1.15 million tonnes a year and is expected to be completed by 2018.

The second project involves the replacement of the top dome and catalyst separation system of the regenerator reactor of the long residue catalytic cracking unit, and will cost about US$25 million (RM110 million).

HRC said the replacement is required to allow continued and efficient operation of the product upgrader unit as the current system will be reaching its end-of-life parameters in 2018.

The projects are to be financed mainly with a mix of cash flow from operations and a further drawdown from an existing term loan.