Hengyuan Refining approves clean air project at Malaysian refinery

Hengyuan Refining Co. Bhd. (HRC)—a subsidiary of Shandong Hengyuan Petrochemical Co. Ltd.’s (SHP) wholly owned Malaysia Hengyuan International Ltd.—is moving forward with its Clean Air Regulation (CAR) project to be executed within HRC’s 156,000-b/d refining complex in Port Dickson, Negeri Sembilan, Malaysia.

Approved by HRC’s board on Sept. 5, the planned $48-million CAR project will ensure the refinery’s emissions comply with clean air regulation requirements mandated by the Malaysian regulatory authorities via installation of air-pollution control systems at the complex’s long-residue catalytic cracking and Platformer-2 units, as well as an emission-monitoring system on the refinery’s flue gas stacks, HRC said.

The project, which will be financed via a mix of cash flow generated from operations and a further drawdown from an existing term loan, is scheduled for completion by June 2019 to meet government compliance requirements.

The operator did not disclose further details regarding the scope of work to be included in the project.

Upgrading works

Announcement of the CAR project comes in the wake of HRC’s start of construction in 2017 on a project to upgrade the refinery to produce Euro 4M-grade motor gasoline (mogas).

The $135-million refinery upgrade—which broke ground in August 2017—involves installation of an integrated complex that is designed to desulfurize the full range cat-cracked gasoline produced by the long-residue catalytic cracking unit to enable production of gasoline that meets the Euro 4M specification requiring sulfur content to be less than 50 ppmv, HRC said in a release on Aug. 25, 2017.

Scheduled to be completed by the end of this year’s fourth quarter, the Euro 4M mogas project will allow the refinery to produce up to 1.15 million tonnes/year of gasoline conforming to the required specification, the operator said.

HRC also is undertaking preliminary works on its Euro 5 gas oil project, which is designed to equip the refinery to comply with the Malaysian government’s requirement for all Malaysian refineries to produce Euro 5-quality diesel by Sept. 1, 2020, the company said in its 2017 annual report.

While further details regarding the Euro 5 gas oil project have yet to be revealed, the operator said front-end studies and technology licensing selection is now under way and that it will carry out preliminary work tie-ins for the proposed project during its major turnaround this year.

These new projects follow SHP’s earlier declaration that it would execute a series of projects to expand, reconstruct, and upgrade the Port Dickson refinery after formally acquiring former plant operator Shell Refining Co. (FOM) Bhd. from Royal Dutch Shell PLC in late 2016 (OGJ Online, Dec. 22, 2016; Feb. 1, 2016).

Contact Robert Brelsford at [email protected].