In April 2012, Hengyi Petrochemical announces to invest in the construction of petrochemical project in Brunei with the subsidiary Hengyi Industrial (Brunei) Limited as implementing subject.

The project is co-funded by Hengyi Petrochemical and Brunei State Oil Company controlled by Brunei government, and the former dominates the cooperation project.

The project divides into two phases with an investment of USD 2.5 billion in the first phase and USD 5.5 billion in the second. The first phase project focuses on PX with expected oil refining capacity of 8 million t /a and PX capacity of 1.5 million-1.8 million t /a, and other by-products of the project include gasoline and diesel sold by Brunei State Oil Company. The planned capacity of second phase project includes 1 million t/a PX and 2 million t/a MEG, etc. Currently, the whole project has applied for approval from China and Brunei governments and will start construction when obtains permission; the first phase project is scheduled to realize production in 2015.

As the development of PET and PTA in China has entered into bottleneck period gradually while upstream PX business has still enjoyed excessive profit, it is inevitable for Hengyi Petrochemical to expand in PX and refining chemical domain to improve its profitability. However, oil refining business in China has still not liberalized and PX project is hard to win permission, the company can build the project quickly by locating the project in Brunei where has rich oil and gas resources and loose policy environment.

Source:ResearchInChina