September 5, 2018 / 10:40 AM / a year ago

China's Hengyi pushes back Brunei refinery start-up to Q2 2019 - sources

* Construction to be completed in Q1 -sources

* CDU to start trial runs in April-May -sources

By Jessica Jaganathan and Florence Tan

SINGAPORE, Sept 5 (Reuters) - The start-up a refinery-petrochemical project in Brunei by China’s Hengyi Industries International Pte Ltd will likely be delayed by a few months to the second quarter of next year, four industry sources said on Wednesday.

The project, at Brunei’s Muara Besar island and which includes a 175,000-barrels-per-day (bpd) refinery, was expected to be mechanically completed by end-2018, with operations slated for the first quarter of next year.

Construction is now expected to be finished by the first quarter of 2019, with the first crude oil cargo to be delivered to the plant at the end of that period, one of the sources said.

Reasons for the delay were not immediately clear, but new refineries often face start-up delays.

Trial runs at the crude distillation unit (CDU) will start around April-May and operation could begin in the second or third quarter of next year, the source said.

Hengyi Industries International plans to import Middle East crude for the refinery’s first cargo, although this will largely depend on economics at the time of importing, the source said.

The company is the trading arm of privately-run Chinese company Hengyi Group, which is a major synthetic fibre producer in China and owns Shenzhen-listed Hengyi Petrochemical.

The Brunei refinery-petrochemical project will produce gasoline, diesel and jet fuel, the sources said. It will not produce any fuel oil for export.

Hengyi Petrochemical did not respond to a request for comment.

The Brunei complex also houses an aromatics plant that will make 1.5 million tonnes per year (tpy) of paraxylene and 400,000 tpy of benzene.

The refinery plans to export oil products to customers in Asia, but it will also have to compete with other new refining projects in the region, including the $27 billion Refinery and Petrochemical Integrated Development (RAPID) complex in Malaysia, which is jointly owned by Malaysia’s Petronas and Saudi Aramco.

RAPID is also aiming for start-up next year. (Reporting by Jessica Jaganathan and Florence Tan; Editing by Tom Hogue)

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