Hengyuan RM580 million Upgrading Project

BackAug 25, 2017

Hengyuan RM580 million Upgrading Project Breaks Ground

PORT DICKSON,25 August 2017 -- Hengyuan Refining Company Berhad ("HRC"), formerly known as Shell Refining Company (Federation of Malaya) Berhad, held a ground-breaking ceremony today to mark the commencement of construction work that will enable the refinery to produce Euro4M grade motor gasoline..

The USD135 million (approximately RM580 million) refinery upgrade will involve the installation of an integrated complex that is designed to desulphurise the full range Cat Cracked Gasoline ("CCG") produced by the Long Residue Catalytic Cracking Unit ("LRCCU"). This will facilitate the production of gasoline that meets the Euro4M specification, which requires sulfur content to be less than 50 parts per million 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, Dr. 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.

Mr. Wang said, "The successful commencement of this project puts Hengyuan Refining Company en-route to produce Euro4M. The Malaysian Government's timeline to implement the Euro4M gasoline specifications for the RON 95 grade throughout the country is by 1 October 2018 ."

"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," Mr. Wang added.

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

Additionally, the construction of the new complex will provide significant economic benefits as it creates up to 1,500 jobs at peak construction periods, thus providing employment opportunities for skilled and competent local workers.

"At Hengyuan, our priority is to care for the environment and community where we operate. Equally important is the health and safety of our employees and members within our fence-line communities, especially during the construction period. We have put in place a very stringent Health, Safety, Secirity and Environment ("HSSE") policy to address this. We also have and will continue to engage and work very closely with relevant authorities, regulators and community members to ensure that the project is completed in a sustainable and progressive manner," Mr. Wang concluded.

The upgrading works are expected to be completed by the fourth quarter of 2018.

About Hengyuan Refining Company Berhad

Hengyuan Refining Company Berhad (HRC), formerly known as Shell Refining Company (Federation of Malaya) Berhad (SRC), was incorporated in Malaysia on 19 September 1960. The company was listed on the Main Board of the then Kuala Lumpur Stock Exchange (now known as the Main Market of Bursa Securities) on 29 October 1962.

On 22 December 2016, Malaysia Hengyuan International Limited (MHIL) acquired 51.0% equity stake in SRC from Shell Overseas Holdings Limited for USD66.3 million. 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 licensed production capacity of 156,000-bpd. The refinery is involved in the refining and manufacturing of petroleum products, and provides employment for more than 500 individuals comprising of staff and contractors.

About Shandong Hengyuan Petrochemical Company Limited

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, ethybenzene, and other petroleum related products.

SHPC has total assets of 4 billion Yuan (approx. USD582.53 million) and employs 1,700 employees. SPHC is one of the Top 100 Leading Enterprises in Shandong and one of the Top 500 Chinese Chemical Enterprises. The Group has garnered multiple accolades over the years and its Chairman and General Manager, Wang Youde, has also received recognition including ‘One of Ten Outstanding Entrepreneurs in Shandong Province' and ‘Outstanding People Award of National Advancements in Productivity', amongst others.

This news release is issued on behalf of Hengyuan Refining Company Berhad by Acendus Communications Sdn Bhd. For further information, please call I-Mae at 012 383 5688 or Michael Poh at 012 395 5202.