Hengyuan Refining Company Berhad (HRC), formerly known as Shell Refining Company (Federation of Malaya) Berhad, held a groundbreaking ceremony last Friday to mark the start of the construction of the Port Dickson refinery upgrade.

The USD135 million refinery upgrade will involve the installation of an integrated complex that is designed to desulphurise the Cat Cracked Gasoline (CCG) produced by the Long Residue Catalytic Cracking Unit (LRCCU).

This will enable the production of gasoline that meets Malaysia’s Euro 4M specification, which requires sulfur content to be less than 50 parts per million (ppm) in volume.

The groundbreaking ceremony was officiated by YB. Dato’ Seri Hamzah bin Zainudin, minister of Domestic Trade, Co-operatives & Consumerism. Also present at the event were Ambassador Extraordinary and Plenipotentiary of the People’s Republic of China to Malaysia, Huang Huikang; YB Dato’ Haji Tun Hairudin Abu Bakar, Negeri Sembilan’s State Executive Councilor; Wang Youde, chairman of HRC and Maarten Stals, managing director of HRC.

“The successful commencement of this project puts Hengyuan Refining Company en-route to produce Euro 4M. The Malaysian Government’s timeline to implement the Euro 4M gasoline specifications for the RON 95 grade throughout the country is by 1 October 2018,” said Wang.

“This upgrading will also include state-of-the-art technologies that have been tried-and-tested in refineries in Shandong, China. Upon completion, this upgrade will allow our Port Dickson refinery to produce up to 1.15 million tonnes of gasoline per annum,” he added.

The integrated complex will use a combination of conventional hydroprocessing and selective liquid-liquid solvent extraction (LLE) technology, which has been applied successfully by licensors in various operating plants in Shandong.

The refinery upgrade is expected to be completed by the fourth quarter of 2018.

Malaysia Hengyuan International Limited (MHIL) acquired 51.0% equity stake in SRC from Shell Overseas Holdings Limited for USD66.3 million in December 2016. MHIL is wholly-owned by Heng Yuan Holdings Limited, which in turn, is a wholly-owned subsidiary of Shandong Hengyuan Petrochemical Company Limited. Hengyuan Refining Company Berhad manages and operates a refinery in Port Dickson, Negeri Sembilan with a production capacity of 156,000 barrels per day (bpd).

Established in 1970, Shandong Hengyuan Petrochemical Company Limited (SHPC) is a state-owned enterprise based in Linyi County, Shandong Province, China. SHPC develops, produces, processes, and markets diesel oil, liquefied gas, propylene, propane, polypropylene, tert-butyl alcohol, oil slurry, asphalt, tert-pentene, ethylbenzene, and other petroleum related products.