Eric Watkins
Oil Diplomacy Editor
LOS ANGELES, Sept. 23 -- Brunei has approved plans of privately held PetroBru Sdn. Bhd. for the construction of a 200,000 b/d refinery and storage facility in Pulau Muara Besar.
"Through our joint-venture partner PetroBru Sdn. Bhd., [we] received an official approval letter from the Brunei government to proceed with further works towards realization of the oil refinery project," said Datuk Sufri Mohd Zin, executive chairman of Malaysia's TRC Energy Sdn. Bhd.
"We will now proceed with the detailed feasibility study, which will take about 6 months," said Sufri, who advised that PetroBru will hire consultant Wood Mackenzie to carry out the additional study. "We expect the project construction to start in the first half of 2010."
The refinery will have a potential expansion to 500,000 b/d. The facility's storage capacity will start at 1 million cu m and eventually will rise to 2 million cu m.
PetroBru completed its feasibility study for the proposed oil refinery and storage facilities and presented its conclusions to the petroleum unit of the prime minister's office in late March.
According to Petrobru CEO Mohd Zaman Noordin, the study showed there is an opportunity for an export-oriented refinery in Brunei based on current and projected supply and demand scenarios for the region.
"Statistics show that the Asia Pacific region accounts for 30% of global demand for oil products," he said, adding, "The region has overtaken North America as the world's biggest oil consumer."
"Based on projection, by 2025 Asia Pacific demand for oil products will account for more than 50% of incremental world oil demand," he said.
"The refinery will be configured towards the production of middle distillates with emphasis on production of diesels based on the region's demand projection till 2025," he said.
Petrobru Chairman Zainuddin bin Dato Seri Paduka Haji Marsal said PetroBru originally estimated that the project would require a capital expenditure of $3-4 billion.
Outside investors are interested in the project, according to Sufri.
"The potential oil refinery in Brunei has attracted interest from oil majors such as Kuwait Petroleum International," he said. "We are in talks to see how we can further maximize the potential of the oil and gas industry in Brunei."
Last November, TRC Energy Sdn. Bhd., a wholly-owned unit of TRC Synergy Bhd's Trans Resources Corp. Sdn. Bhd. subsidiary, acquired a 26% stake in PetroBru from investors Faridza Binti Abdullah, Zainuddin Bin Dato Haji Marsal, and Mohd Zaman Bin Noordin.
Contact Eric Watkins at [email protected].