A look at Hengyi’s Pulau Muara Besar project

|    Danial Norjidi    |

ONE of the biggest ongoing foreign direct investments (FDIs) in Brunei Darussalam is Hengyi Industries Sdn Bhd’s project to develop an oil refinery and aromatics plant at Pulau Muara Besar (PMB).

The project recently reached a new major milestone with the signing of an Implementation Agreement between Hengyi, the Energy and Industry Department at the Prime Minister’s Office and the Brunei Economic Development Board on March 28.

The Implementation Agreement outlines, among others, the execution requirements of the project including Hengyi’s obligations in terms of employment and business opportunities to the country and its people. It also highlights Hengyi’s obligation on health, safety and environment (HSE) requirements for the protection of its employees, contractors and the community.

The CEO of Hengyi Industries, Chen Lian Cai said in his welcoming remarks at the signing, “Hengyi’s Oil Refinery and Aromatics Complex is currently one of the most significant development projects in the area of economics and trade between China and Brunei.”

The plant will process annually approximately eight million tonnes (175,000 barrels per day) of crude and condensate and produce approximately 1.5 million tonnes of paraxylene, 500,000 tonnes of benzene as well as refined products such as gasoline, jet fuel and diesel.

“Hengyi’s Oil Refinery and Aromatics Complex will ensure self-sufficiency of refined products as well as help highlight Brunei’s growing potential as a destination for value-added processing,” said the CEO.

The Implementation Agreement is “a binding agreement that further symbolises Hengyi’s unequivocal commitment to participate in the economic and social development of Brunei,” he said, highlighting that the agreement, among others, outlines Hengyi’s obligation to provide employment and business opportunities to Bruneians as well as a transparent tender and procurement process.

“It outlines our uncompromising pledge to the health and safety of our people and facilities, our assurance to preserving the environment and establishing a corporate social responsibility policy that will benefit local communities in the country.


“Hengyi’s project will not only generate economic spin-offs, employment opportunities and ensure local skill set development, but will also place Brunei on the map as one of the key players in the petrochemical landscape in our region.

“Hengyi will pledge to comply with regulatory as well as technical requirements to ensure that our plant and facilities are constructed, operated and managed according to local and international standards,” he added.

In addition, during the signing ceremony Hengyi also announced its final investment decision of $3.445 billion for the development of the refinery petrochemical complex.

In his speech announcing the final investment decision, the Chairman of Hengyi Industries, Qiu Jian Lin said, “In addition to the signing of the Implementation Agreement, on behalf of Hengyi Group and our shareholders Damai Holdings Limited, I would like to officially announce our Final Investment Decision of $3.445 billion for the development of Hengyi’s refinery and petrochemical complex at Pulau Muara Besar.”

He said that this significant milestone demonstrates Hengyi’s commitment to contribute to Brunei Darussalam’s economic development in line with Vision 2035 by developing the downstream segment of the oil and gas industry.

“Hengyi aims to create value and opportunities by complying with the local business development element. We are grateful to the Government of Brunei and our stakeholders for their relentless support and we look forward to continue working closely with the government to ensure the project’s smooth implementation,” he added.

It was stated in a video presentation at the event that the target for the project’s completion is 2019.

The signing saw the attendance of Pehin Orang Kaya Laila Setia Dato Seri Setia Awang Haji Abdul Rahman bin Haji Ibrahim, Minister at the Prime Minister’s Office and Minister of Finance II as the guest of honour, who delivered a keynote address at the event.

In his speech, the minister described Hengyi Industries’ Crude Oil Refinery and Aromatics Cracker Complex project at Pulau Muara Besar as a testament to Brunei’s attractiveness to reputable international companies as one of the top destinations for foreign direct investments.

The also noted that the signing of the Implementation Agreement is a significant milestone for Brunei Darussalam in its continued objective towards a more conducive and pro-business environment.

“The Hengyi Industries’ Crude Oil Refinery and Aromatics Cracker Complex on Pulau Muara Besar is one of the largest single foreign direct investments the country has seen in recent years, raising optimism about the development aspects and opportunities this project would bring to the country and its people,” he said.

“Furthermore, the successful collaboration of this Joint Venture Company – between the Strategic Development Capital – under the Sustainability Fund of the Ministry of Finance and Zhejiang Hengyi Petrochemical highlights the strong and good relationship between Brunei and China.

“In addition to contributing to the country’s economic diversification and creating jobs for Bruneians, the company is expected to generate business spinoffs for local companies, including small and medium enterprises (SMEs).

“The formalisation of the Implementation Agreement is therefore important, as it outlines, among others, Hengyi Industries’ commitment to regulations and compliance requirements, and its contributions to the country’s economic and social development,” he added.

In his keynote speech, the minister also noted Hengyi Industries’ commitment to provide job opportunities to Bruneians at various levels. “During the implementation stage, there will be a total of 5,000 employment opportunities in various construction fields.

“In the first phase alone, Hengyi Industries expects to offer 971 employment opportunities, of which 40 per cent will be open to locals, from the first year of operation,” he said. “To date, Hengyi Industries already has a 120-strong workforce, of which 62 per cent are locals.”

The minister also noted that Hengyi Industries, with the assistance of Ministry of Education, through Universiti Brunei Darussalam (UBD), has successfully implemented a scholarship programme that has taken in students from UBD to study at Zhejiang University in China, which includes industrial experience in petrochemical plants.

Since the programme began in 2014, four batches of students have been offered scholarships, with the most recent batch of 14 students signing on last February.

The minister went on to share that Hengyi Industries’ investment will also contribute to the development of Pulau Muara Besar as an industrial site that is able to accommodate more projects and activities, including construction and logistics, security and maintenance services.

He explained that, as part of efforts to facilitate this development, the Brunei Government has embarked on the construction of a four-lane, sea-crossing bridge, which will connect the mainland to Pulau Muara Besar, a distance of about 2.7 kilometres.

“This will facilitate the movement of personnel, as well as provide vital services and utilities to the island,” he said.