Hengyuan allocates RM700 million capital expenditure over the next 1-2 years

BackMay 24, 2018

Hengyuan allocates RM700 million capital expenditure over the next 1-2 years

To finance major projects for long-term refinery sustainability and compliance of upcoming regulations

Kuala Lumpur, 24 May 2018 -- Regional major oil-refining company Hengyuan Refining Company Berhad (Hengyuan; Bloomberg: HYR:MK; Reuters: HENY.KL or "the Company") is set to invest RM700 million in capital expenditure (CAPEX) over the next 12-24 months.

The RM700 million CAPEX allocations will primarily be used to finance two cornerstone projects, namely Euro4M Mogas and Atlas II. The two projects are essential for the Company to enhance operational reliability, capture commercial opportunities throughout the value chain and also comply with upcoming regulations on gasoline and diesel specifications.

Wang YouDe, Chairman, Hengyuan Refining Company Berhad: 

"The high CAPEX commitment marks a significant juncture in the Company's future, as we enter our next growth phase by implementing proven and advanced refinery technologies.

These critical investments enable us to achieve our dual objectives of complying with upcoming regulations, and further improving operational efficiencies to maximise refinery margins.

Thus, reaffirms our commitment to deliver high-quality fuels to customers and also ensuring the refinery's long-term reliability and safety to provide sustainable growth for the years to come."


 The Euro4M Mogas project faced a longer-than-expected duration to fabricate the main equipment, and is now scheduled to be completed in the fourth quarter of 2019.

‘While it's unfortunate to experience a longer timeframe for the Euro4M Mogas project, but as a Company, we strive for operational excellence in a safe environment, and believe that this highly technical project must follow its due course. The adjusted timeline would not adversely impact Hengyuan's commitment in meeting product delivery commitments and we would like assure our customers that there would be no disruption of supply," Wang said.

The Atlas II will be completed during the refinery-wide 2018 Major Turnaround (MTA) exercise starting from August 2018. Once completed, the integrated complex will be able to produce 1.15 million tonnes per annum.

On top of the two projects, resources will be allocated to install facilities in order to comply with future regulatory requirements, namely Clean Air Regulation (CAR) and Euro 5 gasoil. These installations will tie-in during the scheduled shutdown in the third quarter of 2018, to avoid future refinery shutdowns.

About Hengyuan Refining Company Berhad (www.hrc.com.my)

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 stateowned enterprise based in Linyi County, Shandong Province, China. SHPC develops, produces, processes, and markets diesel oil, liquefied gas, propylene, propane, polypropylene, tertbutyl 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

Issued for and on behalf of HENGYUAN REFINING COMPANY BERHAD by Aquilas Advisory (Malaysia) Sdn Bhd. For media enquiries, please contact:

Mr. Surya Suharman
T: +6019-357 1605

Ms. Julia Pong
T: +603- 27111391 / +6012-3909 258

Ms. Kai Pieng
T: +6017-398 3358

Mr. Hanif Kamarudin
T: +603- 27111391 / +6012-3909 258