Hengyi Petrochemical Brunei PMB Petrochemical Project Is Fully Commissioning, Short Term Or Full Load Output.

Heng Yi Formosa Petrochemical Co (hereinafter referred to as "Hengyi petrochemical") issued an announcement in July 12th, saying that the "PMB petrochemical project" invested by the company's holding company, Brunei Brunei, in Brunei BruneiDarussalam (PulauMuaraBesar), has completed construction, installation and commissioning of the project. The company completed the commissioning of public works in March 2019. The main equipment of the July project was fully implemented. All the devices have been transferred to the joint commissioning phase, and are expected to enter the commercial operation stage quickly.

According to the announcement, Brunei PMB petrochemical project crude oil processing capacity of 8 million tons / year, including annual production of 1 million 500 thousand tons of aromatics, 500 thousand tons of benzene and nearly 6 million tons of gasoline, diesel, coal and other products. This project is a strategically significant project built by the company overseas. After the project is put into operation, the company's petrochemical industry chain will further extend to the upstream, effectively break through the bottleneck of raw materials, open up the "last mile" of the entire Petrochemical Fiber industry chain, realize the strategic layout of "industrial chain integration", substantially improve the raw material supply pattern of the existing PTA polyesters industrial chain, resolve the market risk of raw material supply, and further enhance and consolidate the core competitiveness of the main business.

According to insiders here, Brunei PMB petrochemical project accounted for 30% of the shares of Brunei government, which helped Hengyi Petrochemical to sell some of its refined oil locally and the rest to other Asian Pacific countries. It is expected to be formally put into operation in July 2019. After commissioning, it is expected to achieve full load output in a short time.

Reporters learned here that Brunei (Brunei) is located in Southeast Asia connecting the South China Sea and India ocean, and near the Strait of the Pacific, near Singapore, Malaysia and other countries. The location is superior and the climate is mild all the year round, which is conducive to stable production and close to the new commodity exchange market. In recent years, the oil demand gap in the Asia Pacific region is relatively large, while Brunei's oil production and reserves are relatively abundant, and continue to be a net exporter of crude oil in its neighboring areas.

According to the BP world energy statistics yearbook, by the end of 2017, Brunei's oil reserves reached 1 billion 100 million barrels, accounting for 0.1% of the total proven reserves in the world, accounting for 2.3% of the total reserves in the Asia Pacific region, and ranked seventh in the Asia Pacific region. At present, Brunei's oil output reaches 5 million 450 thousand tons / year (112 thousand barrels / day), and about 97% for export, of which 3 million tons of crude oil (accounting for 55% of Brunei's oil output, accounting for 56% of exports) will provide Brunei PMB project, providing 40% crude oil raw materials for PMB projects. The remaining 60% of Brunei's crude oil is supplied by Qatar, mainly including 3 million tons of crude oil and 1 million 700 thousand tons of condensate.

It is reported that the PMB refinery project is located in the large island of Brunei, which is the largest overseas investment project of Chinese private enterprises. It is also a key project of "one belt and one road". The company has a 70% stake and Brunei government holds 30%. The total investment of the first phase PMB project is about 3 billion 450 million US dollars (1 billion 750 million dollars, 12 years long term loan) led by the state bank and the import and export bank, to build 8 million tons of crude oil processing capacity, and 1 million 500 thousand tons of p-xylene and 500 thousand tons of benzene production capacity. As of April 2019, the total progress of the first phase of the project was over 95%, of which procurement, civil engineering, project design, steel structure installation and so on were all completed. The installation of equipment and pipelines was coming to an end. The east channel and 6, 7, and 8 wharf had been formally put into berthing. The large number of yards, coal terminals and Chemical Wharf had been put into use. Three oil terminals were also completed, and the Brunei PMB cross sea bridge was officially opened in May 2018. In April 30, 2019, the first shipment of 80 thousand tons of crude oil entered the factory, marking that the Hengyi Brunei refining and chemical project entered the trial run stage officially and was expected to go into operation in 2019 July.

The total production capacity of the two phases or the self sufficiency of PX raw materials will be achieved. The two phase PMB project plans to invest nearly US $12 billion, the new crude processing capacity of 14 million tons / year, the production of 2 million tons / year PX and 1 million 500 thousand tons / year ethylene, has entered the stage of demonstration, is expected to be put into operation in 2022, will form 22 million tons of crude oil processing capacity, for the company to create "crude -PX-PTA-PET- polyester filament chemical fiber weaving" of the whole industry chain layout. After the two phase project is put into operation, the production capacity of 4 million tons of PX can basically achieve the self-sufficiency of PTA supporting PX raw materials. The company will complete the coverage from basic resources to raw materials for textile industry.

Southwest Securities analyst Yang Lin believes that compared with domestic enterprises, Hengyi Brunei petrochemical project will enjoy many advantaged cost advantages: 1) low logistics costs. 40% crude oil is provided by Brunei, the cost of crude oil logistics is relatively low, and oil products are sold in the Southeast Asian market, and the sales radius of target market is small. 2) the advantage of processing cost is obvious. The power cost of the self built power plant is low, and the self generating cost is only 1/4 of the domestic industrial electricity price. With the energy optimization and integration of the whole plant and low temperature waste heat utilization technology, the unit energy consumption cost advantage of the product is obvious. 3) preferential tax incentives. Brunei project is not subject to the import quota of crude oil and refined oil export quotas, and is in line with the Brunei government's "2035 great aspirations". Therefore, the project can enjoy a long time zero tax policy, which has an obvious advantage over the domestic tax burden of about 40%. 4) process optimization and flexible production operation. Adopting the mode of refining and chemical integration of "small oil head and large aromatic hydrocarbon", we should give full play to the advantages of "suitable oil and oil" and "suitable Fang Zefang". The 1 million 500 thousand ton PX unit has the largest single line capacity in the world at present, and the public utilities facilities are in one step to provide enough space for further development. 5) obvious advantages in operation. Compared with domestic private refineries, crude oil is independent of procurement and is not subject to quota restrictions. 40% of crude oil is supplied locally to Brunei, while domestic imports are basically dependent on imports. At the same time, oil products are marketed in the near future without export restrictions, while domestic private refineries rely on exports.

According to public information, Hengyi Petrochemical is a subsidiary of Hengyi group, which has been focusing on the research, production and sales of PTA- polyester fiber products. In 2018, the company achieved a total revenue of 84 billion 948 million yuan, an increase of 28.79% over the same period last year. At the end of the reporting period, the total assets of the company amounted to 59 billion 625 million yuan, an increase of 66.53% compared with the beginning of the year. The asset liability ratio was 62.66%. The owner's equity of the listed company's shareholders was 17 billion 802 million yuan, and the net assets per share attributable to the shareholders of the listed company were 6.77 yuan.

In the first quarter of 2019, Heng Yi Petrochemical realized its operating income of 20 billion 976 million yuan, an increase of 25.93% over the same period last year, a net profit of 423 million yuan to the parent company, a decrease of 42.88% compared with the same period last year, and a net profit of 411 million yuan after deducting the net profit, which was 36.10% lower than that of the previous year.