MALAYSIAN UPGRADE DELAYED

Shell Refining Co. (FOM) Bhd. has deferred the second stage of a refinery upgrading project in Malaysia because of rising construction costs. Shell said the cost of a hydrocracker and associated equipment at its Port Dickson refinery has risen to 1.4 billion ringgits ($509 million) from an initial estimate of 800 million ringgits ($291 million). The sharply higher figure results mainly from a jump in world refinery construction costs in expectation of major orders, particularly from the Middle

Nov. 11, 1991

Shell Refining Co. (FOM) Bhd. has deferred the second stage of a refinery upgrading project in Malaysia because of rising construction costs.

Shell said the cost of a hydrocracker and associated equipment at its Port Dickson refinery has risen to 1.4 billion ringgits ($509 million) from an initial estimate of 800 million ringgits ($291 million).

The sharply higher figure results mainly from a jump in world refinery construction costs in expectation of major orders, particularly from the Middle East in the aftermath of the Persian Gulf war.

Long lead time items were ordered for the project, and design of the unit is complete.

Shell will write off about 60 million ringgits ($21.8 million) on the project against 1991 profits. It will keep the hydrocracker under review with the aim of restarting when conditions are more favorable.

Shell said the action on the hydrocracker will not affect construction of import and export facilities and several other performance enhancing projects at the refinery. These will be commissioned as planned in mid-1992.