Hengyuan fully operational after largest scheduled turnaround in refinery history
Hengyuan fully operational after largest scheduled turnaround in refinery history
- Simultaneous completion of ATLAS II infrastructure project to enhance refinery's long-term profitability
- Recorded RM122.5 million net loss in 3Q18 due to operational downtime from 11-week Major Turnaround
- Full steam ahead with previously announced investments of over USD250 million for medium-term growth plans
Port Dickson, [28] November 2018 – Hengyuan Refining Company Berhad (Hengyuan or "the Company"; Bloomberg: HYR:MK; Reuters: HENY.KL) today announced the refinery is now fully operational and back on stream, following the successful post-Major Turnaround (MTA) 10-day start-up period to gradually commission the plant’s operations.
The refinery which has a licensed capacity of 156,000 barrels per day, resumed operations on 21st October 2018, 2 days ahead of schedule. The MTA, which commenced on 6th August 2018, was successfully completed safely and below the approved budget by USD1.5 million or RM6.2 million.
The scope of work conducted during the 11-week turnaround was the largest since the refinery's incorporation. With the turnaround’s scope of work approved by the Department of Occupational Safety and Health (DOSH), the Company expects to shorten future turnarounds for the refinery.
The Company also finished significant projects as planned during the MTA, which will reduce production downtime when commissioning and starting up new production units under regulatory compliance projects.
In this large-scale event, Hengyuan also simultaneously concluded the ATLAS II infrastructure project, installing a new 420-tonne top dome and cyclones in the Long Residue Catalytic Cracking Unit (LRCCU). The new dome is expected to extend the LRCCU's operating life for another 20 years, enabling the refinery to continue efficient and profitable operations.
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Wang YouDe (王有德), "Our endeavours have given us a firm foundation to not only shorten future turnarounds, but also improve refinery efficiency, reliability and operational performance. This is supported by the Atlas II replacement of the LRCCU dome and the completion of all necessary pre-work for sustainability and compliance projects, which will ensure the long-term sustainability of the refinery. In addition, we are very happy to be amongst the first refineries in Malaysia to receive approval for a Statutory Inspection Scheme and to have fulfilled all the inspection scope set by DOSH. With the MTA in the rear-view mirror, we look forward to resuming our day-to-day operations and serving our customers’ needs by delivering high quality petroleum products from the fourth quarter of 2018." |
Third quarter ended 30 September 2018 (3Q18)
For 3Q18, the Company recorded a lower revenue of RM2.1 billion compared to RM3.0 billion in the same period last year, with a net loss of RM122.5 million against a net profit of RM361.8 million in the comparative period. The loss recorded in the current quarter was a result of the scheduled downtime in undertaking the MTA. Margins for the comparative periods of 2017 were significantly higher as market refining margins were influenced by unplanned production outages caused by hurricanes in the Gulf of Mexico and a fire incident reported in a world-scale European refinery in the third quarter of 2017.
The refinery also recorded lower sales volume for 3Q18 and the nine months ended 30 September 2018 (9M18) of 5.9 million barrels and 26.9 million barrels respectively, from 10.9 million barrels and 30.7 million previously.
Cumulatively, revenue for 9M18 stood at RM8.7 billion, with a net profit of RM30.9 million for the period.
Commenting on Hengyuan’s prospects, Mr.Wang said:
"We understand the crucial need to strengthen the refinery's competitive-edge for the long term. Thus, we have approved investments of over USD250 million since December 2016 and further investments are in development. These investments will support our medium-term growth plans and ensure the sustainability of the Company."
Safety performance
With safety as a paramount concern, Hengyuan is pleased to announce that safety performance throughout the MTA was satisfactory with no lost time injury incidents. This achievement is significant as there were approximately 3,000 local and foreign workers on-site who, together, worked more than 1.8 million man-hours.
The Company has achieved more than 5 million injury-free man-hours since July 2016.
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
Issued for and on behalf of HENGYUAN REFINING COMPANY BERHAD by Aquilas Advisory (Malaysia) Sdn Bhd.