Hengyuan Refining approves unit revamp for Port Dickson refinery

Hengyuan Refining—a subsidiary of Shandong Hengyuan Petrochemical Co.—has approved a $26.61-million investment for execution of a Euro 5-quality gas oil project at its 156,000-b/d refining complex in Port Dickson, Malaysia.

Jul 9th, 2019

Hengyuan Refining Co. Bhd. (HRC)—a subsidiary of Shandong Hengyuan Petrochemical Co. Ltd.—has approved a $26.61-million investment for execution of a Euro 5-quality gas oil project at its 156,000-b/d refining complex in Port Dickson, Negeri Sembilan, Malaysia.

The project will involve a revamp of the refinery’s existing hydrodesulfurization Unit No. 2 to help meet Malaysia’s upcoming 10-ppmw Euro 5 gas oil sulfur specification—which takes effect on Sept. 1, 2020—and to reinstate the unit’s capacity to 46,180 b/d, HRC said.

Planned execution of the project will enable the refinery to continue producing Euro 5 gas oil with reasonable unit shutdown intervals at the lowest possible capex commitment, according to the operator.

The project—which will be financed using a mix of cash flow generated from operations and drawdowns on the existing borrowing facilities—is one of three regulatory-driven investments HRC is undertaking as part of its strategy to improve the refinery’s overall competitiveness, the company said.

The other two regulatory-driven investments include a project designed to upgrade the Port Dickson refinery to produce Euro 4M-grade motor gasoline (mogas) as well as the Clean Air Regulation (CAR) project (OGJ Online, Jan. 21, 2019).

Targeted for completion during first-quarter 2020, the Euro 4M-grade mogas project—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 refinery’s long-residue catalytic cracking unit (LRCCU) to enable production of gasoline that meets the Euro 4M specification requiring sulfur content to be less than 50 ppmv (OGJ Online, Sept. 6, 2018).

The operator’s CAR project—which involves installation of air-pollution control systems at the complex’s LRCCU and Platformer-2 unit, as well as an emission-monitoring system on the refinery’s flue gas stacks—also remains under way.

Designed to ensure the refinery’s emissions comply with clean air regulation requirements mandated by the Malaysian regulatory authorities, the CAR project is scheduled for completion by June.

HRC also recently approved a $66.4-million investment to develop and build a hydrogen manufacturing unit as part of a hydrogen generation (H2Gen) project for production of cleaner fuels at the refinery by September 2020.

Contact Robert Brelsford at rbrelsford@endeavorb2b.com.

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