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Downstream Expansion

Southeast Asia is has a rather extensive refining, gasification and liquefaction

capacity and this report highlights the capabilities and infrastructure available
in some of the member countries.

Brunei growth in other industries over aromatics complex at Pulau

Brunei's small, wealthy econ- the long term. Muara Besar, Brunei. The ap-
omy is based heavily upon proval for the complex was
proceeds from exports of crude Brunei has one refinery, part granted in February 2013.
oil and natural gas. Brunei relies of BSP, with a capacity of about
on hydrocarbon revenues for 8,600 bbl/d. Around 5,000- The company earlier signed
nearly two-thirds of its gross 6,000 bbl/d of the refinery's a land lease agreement for the
domestic product and the vast output is used for local con- project with the Brunei Economic
majority of its merchandise sumption. The remainder of Development Board (BEDB) in
exports and government rev- Brunei's crude oil is exported April 2012. The front end engi-
enues. Lower international and refined elsewhere. neering and design (FEED) of
oil prices since late 2014 have the project is being undertaken
dampened the country's ex- Brunei plans to expand its refin- by Sinopec Engineering.
port revenues. However, the ery capacity, as Chinese company
government intends to bolster Zhejiang Hengyi Group has plans The design and engineering
investment in its oil and gas sec- to construct a new refinery with a plans for the project are expected
tor and diversify the country's capacity of 148,000 bbl/d. How- to be completed by mid-2013,
economic base by promoting ever, the project has encountered after which construction will
several delays commence. The plant site will
since 2011. If cover an area of about 260ha. The
built, this new fa- project is expected to generate
cility could shift about 800 to 1,200 jobs.
the dynamics of
the country's oil UOP Honeywell has been
exports in favor awarded the contract to provide
of consuming aromatics production technolo-
more crude oil gies for the new plant. Aromat-
R and exporting
more petroleum
ics are used in the production
of polymers, plastics, resins and
E products. synthetic fibres, including poly-
ester and nylon.
P Zhejiang
Hengyi Petro- The project will be implemented
O chemicals (Zhe- in two phases, with the first phase
jiang Hengyi) scheduled for completion in 2015.
R will construct
T an integrated
refinery and
The first phase of the project
will enable the complex to

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produce 135,000 barrels per unit with a capacity of one million nesia now struggles to attract
day of crude and condensates, tonnes per year. sufficient investment to meet
1.5 million tonnes per annum growing domestic energy con-
(mtpa) of diesel, 400,000tpa of Other project activities will in- sumption because of inadequate
gasoline, 1.0mtpa of jet A-fuel, volve the construction of docks, infrastructure and a complex
1.5mtpa of naphtha cracker, a tank field, a power station and regulatory environment. Indo-
1.5mtpa of paraxylene and a sea water desalination facility. nesia encompasses more than
500,000tpa of benzene. 17,000 islands, presenting geo-
The construction of the complex graphical challenges in match-
The second phase of the project is expected to require an invest- ing energy supply in the eastern
will involve the expansion of the ment of $4.32bn. Zhejiang Hengyi provinces with demand centers
refinery to introduce new units for will spend $1.5bn from its own in Java and Sumatra. Also, ur-
the production of olefins. It will fund sources, while the remain- banization and demand in other
add new units to produce one mil- ing $2.82bn will be obtained areas of the country are rising at
lion tonnes per year of paraxylene through bank loans. It is currently a faster pace than energy infra-
and two million tonnes per year the largest overseas investment structure development.
of mono ethylene glycol (MEG). by a privately-owned Chinese
firm. The project is estimated to Indonesia's total refinery capac-
Construction works for the generate revenue of about $10bn ity was an estimated 1.1 million
project will include the installation per annum. b/d at the beginning of 2015, at
of an atmospheric and vacuum six major refineries and a few
distillation unit with a capacity Indonesia smaller facilities. The overall
of eight million tonnes per year, Indonesia, with a population utilization rate of these refineries
a hydrocracking unit with a ca- of 253 million people in 2014, is was less than 90% in 2014 (Ta-
pacity of a 2.2mtpa, an aromatic the most populous country in ble 1). Pertamina expanded the
complex unit with a capacity of Southeast Asia and the fourth non-crude capacity of its Cilacap
1.5mtpa, a diesel hydrogenation most populous country in the refinery in 2015. The two largest
unit with a capacity of 1.5mtpa world, behind China, India, refineries have the capability to
and a kerosene hydrogenation and the United States. Indo- process imported sour crude oil,


but the other refineries are not as growth because there has been ships. These capacity additions
complex. Indonesia's swiftly ris- a lack of government financial will require Indonesia to seek
ing oil demand has put pressure incentives to stimulate foreign more crude oil imports while the
on the government to upgrade investment in the sector. Since gap between the country's crude
its refining capacity to reduce the construction of the Balongan oil and condensate output and
its reliance on more expensive refinery in 1994, no new refineries demand widens.
imported oil products. Indonesia have been built in Indonesia.
is also seeking to enhance refin- Indonesia has three liquefac-
ing capabilities to process higher Pertamina unveiled its Refin- tion plants with a combined op-
octane gasoline and fuels that ery Development Master Plan erating production capacity of 1.3
meet Euro IV emissions specifica- to boost total refinery capacity to trillion cubic feet per year (Tcf/y)
tions for reduced sulfur content almost 1.7 million b/d and signed (Table 2). A lack of sufficient gas
in vehicles. several agreements to partner reserve additions in the Arun
with international oil companies. field in North Sumatra resulted
Indonesia's petroleum con- The NOC will team with Saudi in declining LNG exports from
sumption reached nearly 1.7 Aramco on the Dumai, Cilacap, the former Arun liquefaction
million b/d in 2014, and refinery and Balongan refineries, with plant in recent years. Pertamina
output met only about 55% of Sinopec on the Plaju refinery, and converted the facility to a regasi-
the consumption of domestic oil with Japan's JX Nippon Oil on the fication terminal in late 2014. The
products, according to FACTS Balikpapan refinery. Pertamina Donggi-Senoro LNG terminal,
Global Energy (FGE). Oil product expects final investment deci- located in Central Sulawesi, is the
imports met the remaining de- sions on the projects will occur newest plant, and it was commis-
mand. Current refining capacity in 2017 and the upgrades to be sioned in mid-2015. At least 25%
is insufficient to meet demand complete around 2022. Indonesia of the new capacity coming online
also announced in Indonesia is slated to supply
plans to build four the domestic market.
new refineries,
each with capaci- The government intends for
ties of 300,000 b/d the current regasification fa-
through public- cilities to serve the domestic
private partner- electricity plants and industrial

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customers in are part of the country's eco-
Java and Su- nomic transformation program
matra (Table to leverage its resources and
3). Most of geographic location to be one of
the country's Asia's top energy players by 2020.
proposed re- Another key pillar in Malaysia's
gasification energy strategy is to become a
capacity is regional oil and natural gas stor-
located in age, trading, and development
Java. In the hub that will attract technical ex-
eastern re- pertise and downstream services
gions of the that can compete in Asia.
c o u n t r y,
where there According to FGE, Malaysia has
is a small 591,000 barrels per day (bbl/d)
but growing of refining capacity at six facili-
demand for ties. Malaysia invested heavily
natural gas, in refining activities during the
Pertamina past two decades and is now
and PLN (Indonesia's state elec- up almost 20% of the total gross able to meet most of its demand
tricity firm) announced plans to domestic product. New tax and for petroleum products domesti-
develop several small mini-LNG investment incentives, starting in cally, after relying on refineries in
terminals with a total capacity 2010, aim to promote oil and natu- Singapore for many years.
of less than 50 Bcf/y. ral gas exploration and develop-
ment in the country's deepwater As part of Malaysia's goal to
Malaysia and marginal fields as well as compete with the oil refining
Malaysia's energy industry is promote energy efficiency meas- and storage hub in Singapore,
a critical sector of growth for the ures and use of alternative energy PETRONAS plans to build a $16
entire economy, and it makes sources. These fiscal incentives billion refining and petrochemi-

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cals integrated development the new ATT Tanjung Bin Terminal will have a storage capacity of
project (RAPID) in Johor state by 2015. This terminal brought more than 10 million barrels to
at the southern tip of Peninsular 7 million barrels of oil storage house crude oil and oil products
Malaysia. This project includes a capacity online in 2013. by the end of 2014 with a potential
300,000 bbl/d refinery, which in- to expand to 41 million barrels in
dustry expects will turn Malaysia The Pengerang oil storage ter- the future. This terminal bolstered
from a net oil product importer to minal in Johor, Malaysia's largest southern Malaysia's oil storage
a net oil product exporter once it is commercial oil storage facility, capacity by 70% to more than 25
operational. The project, million barrels. Concord
which was sanctioned Energy (Singaporean oil
in 2011, has incurred trading firm) and Dia-
several delays, although logue proposed another
PETRONAS made a final Johor-based terminal
investment decision in with a capacity of 16 mil-
2014. The NOC plans to lion barrels.
bring the refinery online
in 2019. As part of PETRONAS'
plan to invest in up-
Malaysia is expanding stream and downstream
its oil terminal and stor- activities in the Sabah
age capacity as the need state, the national oil com-
for more oil storage and pany (NOC) is construct-
trading grows within ing the Sabah Oil and
Asia and as its neighbor, Gas Terminal (SOGT)
Singapore, lacks the space in Kimanis, Sabah. The
to continue increasing its terminal is scheduled to
massive storage capac- receive oil and natural
ity. Most of Malaysia's gas by the second half of
oil product and crude 2014. SOGT will become
oil terminals are located a central hub for much
along the eastern coast of of the hydrocarbon de-
Peninsular Malaysia and velopment in offshore
offshore as floating stor- Sabah from new fields
age and production facili- coming online recently at
ties. Malaysia intends to Gumusut/Kakap, Kikeh,
expand its storage capac- and Malikai. The terminal
ity to about 83 million has a design capacity to
barrels by 2020 and is in process 300,000 bbl/d
the process of construct- of crude oil, more than
ing several projects in the 1 billion cubic feet per
next few years. day (Bcf/d) of natural
gas, and 77,000 bbl/d of
Malaysia is developing condensate.
several storage terminals
in Johor, adjacent to Sin- The PETRONAS LNG
gapore. Malaysia International started operations in early 2014. complex located in Bintulu in the
Shipping Corporation (MISC), The facility is owned by a joint state of Sarawak is the main hub
and global oil trader, Vitol Group, venture of Vopak (Dutch) and for Malaysia's natural gas indus-
are expanding storage capacity at Dialogue Groups (Malaysia) and try. PETRONAS owns majority


interests in facility's three LNG demand in Sabah by reprocess- sanctions have significantly
processing plants (Dua, Tiga, ing at the proposed Lahad Datu impeded the countrys efforts to
and Satu), which are supplied by regasfication plant. The project realize its oil and natural gas pro-
the country's offshore natural gas partners intend for the project duction potential. These factors
fields. PETRONAS LNG is one to be online by 2018. Altogether, have also severely hampered
of the largest LNG complexes in proposed liquefaction projects the development of necessary
the world, with eight production and expansions are likely to add energy infrastructure. However,
trains and a total liquefaction about 335 Bcf/y to Malaysia's U.S. and European Union sanc-
capacity of 1.1 Tcf/y. Japanese export capacity over the next tions were eased or suspended
financing has been critical to few years. in 2012 and 2013 in response to
the development of Malaysia's political and economic reforms
LNG facilities. The complex at Myanmar in Burma.
Bintulu also hosts Shell's GTL Myanmar is an important
project, which converts natural natural gas producer in South- Following the suspension of
gas into nearly 15,000 bbl/d of east Asia, although its upstream sanctions, more international
petroleum liquids. PETRONAS hydrocarbons sector is severely companies have initiated oil and
is currently developing a ninth u n d e rd e v e l o p e d . F i n a n c i a l natural gas exploration efforts in
train and a small-scale expan- constraints by Burmas national Burma. The Burmese government
sion at PETRONAS LNG, and oil company, a lack of technical is keen to attract foreign invest-
these facilities combined will capacity, opaque regulatory pol- ment and technical assistance
add 205 Bcf/y of capacity by the icy, insufficient investment by and, starting in 2011, has issued
end of 2015. foreign firms, and international production-sharing contracts

PETRONAS proposed two

floating liquefaction terminals
offshore Sarawak and Sabah to
capture greater economic value
from the country's smaller, more
remote gas fields. These plants
would have flexibility to serve
the export or domestic markets.
The PETRONAS FLNG project,
located off Sarawak near the
will have a capacity of 58 Bcf/y
and will use natural gas from
the Kanowit field. PETRONAS
plans to market gas from the
facility to the domestic market.
The project is under construc-
tion and is scheduled to com-
mence in 2016. Rotan FLNG,
the second proposed offshore
LNG terminal, will monetize
gas production from the Rotan
field northeast of Sabah in the
South China Sea. The terminal
has a design capacity of 72 Bcf/y
and could serve some domestic

Report 12 HYDROCARBON ASIA, JULY-SEPT 2016 Visit our website at:
through direct negotiations or commitments to supply 2 mil- Dawei, Li Hui, a vice president
recent licensing rounds. lion barrels of crude oil per year of Guangdong Zhenrong and
to MOE for the domestic use. head of the company's refining
Burma had less than 50,000 b/d Many Chinese Companies like business, told Reuters.
of refining capacity in 2015, and CNPC, GDZR and Thai Com-
utilization rates are less than 40% panies are now approaching to The Chinese firm will hold 70
as a result of aging infrastructure MOE to get this new refinery percent of the project, and the
within the countrys three small project. MOE explained them remaining 30 percent shared by
state-owned refineries. Burma that they can do feasibility study three Myanmar firms - military-
approved the construction of a for this refinery projects by their linked Myanmar Economic
100,000-b/d refinery by Chinas own interest and cost incurred Holdings Limited, Myanmar
Guangdong Zhenrong Energy to complete the Feasibility Study Petrochemical Corp, an entity
Company in early 2016, one of Report (FSR) shall be borne by affiliated with the country's en-
the largest foreign investments the investor(s). ergy ministry and Yangon En-
in the country to date. This facil- gineering Group, controlled by
ity is designed to supply both With regard to Thanlyan refin- privately-run HTOO Group of
domestic and export markets ery, total of 9 companies (from Companies, Li said.
with oil products. Japan, China, Korea, etc.) have
already submitted their feasibility References
Myanmar is looking to build study reports and proposals for Asia Pulse
a slew of new oil storage termi- revamping the upgraded factory Association of Southeast Asian
nals and jetties near its former once again. This time, it is learnt Nations (ASEAN)
capital Yangon as its small and that MOE will hire international Bernama (Malaysian National
ageing refineries cannot keep up tender specialists to evaluate the News Agency)
with rapidly rising demand for proposals of bidders. Brunei Times
refined products.
Chinese state-controlled com- ExxonMobil
Myanmar has three refiner- modity trader Guangdong FACTS Global Energy
ies: Thanlyin, Chauk and Mann Zhenrong Energy Co has won IHS Energy
Thanpayarkan; having total ca- approval from the Myanmar Indonesia's Ministry of Energy
pacity of 51000 Barrels of Oil Per government to build a long- and Mineral Resources, 2014
Day (BOPD). Thanlynn refinery planned $3 billion refinery in Handbook of Energy &
is already revamped by India the Southeast Asian nation in Economic Statistics of Indonesia
loan project. Now Mann refinery partnership with local parties International Energy Agency
is under revamping. There are 3 including the energy ministry. Malaysia Business Times
old and 2 new (total 5) fertilizer Malaysia Energy Information
plants in Myanmar. The project, which also in- Hub
cludes an oil terminal, storage
Ministry of Energy (MOE) is and distribution facilities, would MiTA Services
now planning to construct a new be one of the largest foreign Oil & Gas Journal
refinery near Thanpayakan; load- investments in decades in PETRONAS
ing, offloading and jetty facilities Myanmar. Myanmar currently Platts
are found much more favorable imports most of its fuel. Reuters
than any other places in My- Shell
anmar. The crude oil will be The Myanmar Investment The World Bank, Data:
exported from the Middle East Committee granted the Chinese Indonesia
Country via China-Myanmar firm approval to build a 100,000 U.S. Energy Information
oil pipe line which is still under barrels-per-day (bpd) refinery Administration
construction. CNPC has given its in the southeast coastal city of World Gas Intelligence HA