Refinery pumps life into energy sector

Like a modern version of the 15th-century Chinese navigator Zheng He, who commanded the largest fleet ever to sail to the Indian Ocean up until World War II, P.C. Huang believes that if Chinese businessmen become more engaged in global markets, they will not be a threat to other countries.

"What Chinese companies pursue is not aggression but a win-win relationship, and what a stronger China wants is not to conquer other countries but to develop together," he said.

Huang is managing director of Hengyi Industries, a subsidiary of Zhejiang Hengyi Group, Co, China's largest chemical-fiber supplier for the textile industry. Hengyi is currently building a $4.29 billion refinery project in Brunei that will house the country's first complex producing aromatics.

The complex can be used to make a range of important chemicals and substances, including polyester and nylon.

"Hengyi's development at home in China requires a sufficient supply of raw materials, while Brunei needs Hengyi to help revive its bottlenecked energy industry," Huang said.

"The project is helpful to the strategic interests of the company and the two countries," said Huang, who is also deputy general manager of Hengyi Petrochemical.

Brunei is trying hard to diversify its economy by developing non-energy sectors, so it has never neglected to pump new life into its backbone oil industry. It does this by developing downstream plants, instead of just exporting crude oil.

The refinery complex is the largest overseas investment by the privately owned Chinese firm. It is expected to be completed by 2015 on 259 hectares of land on Pulau Muara Besar island under a 30-year lease, Hengyi said on its website.

It is designed to process 15 million metric tons of crude oil a year and churn out products such as p-xylene and aromatic hydrocarbon.

The refinery is also expected to supply nearly 3 million tons of diesel, gasoline and jet fuel annually to the local market in Brunei.

A portion of the crude oil will be sourced locally by Brunei Shell Petroleum, which also runs Brunei's only refinery.

"Several foreign companies made the same request to the Brunei government before we did, but none of them managed to get local oil," said Huang. "The government agreed to supply the crude oil to us because it believes Hengyi will be helpful to the country's development in the long run."

Brunei authorities have welcomed the project, saying the plant will help reduce the economy's chronic reliance on exports of oil and natural gas, which contribute to more than 60 percent of Brunei's GDP and more than 90 percent of its export value.

It is also projected to create more than 2,000 jobs, mostly for locals, while local organizations and companies can take a stake of up to 30 percent in it.

Huang expressed optimism about the company's future in Brunei and said he had confidence in the country's potential.

"We will use existing oil reserves when the refinery is completed. At the same time, we will explore new oil fields and downstream industries, and try to extend the business to include natural gas in the future," said Huang.

"We are based in Brunei, but our market is not confined to it or to the Chinese mainland. We may also target other East Asian countries, as well as India, in the future," Huang said.

(China Daily 12/18/2013 page10)