China-Brunei joint venture invests $13.6 billion in oil refinery
Despite adverse macro-economic conditions, a petrochemical joint venture between Brunei and China, Hengyi Industries, plans to invest about $13.7 billion in the construction of the second phase of its oil refinery facility at Pulau Muara Besar, a large industrial park on an island in Brunei Bay, Xinhua reported.
Chen Liancai, Hengyi’s chief executive officer, told Xinhua that the construction period is set for three years. Upon completion, the facility will add 14 million tonnes of crude oil processing capacity which would supply both the regional and international markets.
Hengyi Industries is a 70:30-joint venture between China’s Zhejiang Hengyi Group and Damai Holdings, a strategic development fund owned by the Brunei government. The company already invested about $3.45 billion in the first phase of its oil refinery and petrochemical site at Pulau Muara Besar. It went full operational in November 2019 with eight million tonnes of crude oil processing capacity per year.
The investment in the second phase is expected “to create jobs in Brunei and boost related local industries,” Chinese company officials said.
Question mark over future global oil demand
However, the announcement comes at a time when the coronavirus is battering the world economy and demand for travel and the volume of consumer goods transport have dropoed sharply, and with it global demand for fuel. It also contradicts the pessimistic forecasts for oil demand in the post-Covid 19 world as global transport is shifting to electric and other alternative power and the era of fossil fuels seem to come slowly to and end.
UK energy giant BP was the first to say that the relentless growth of oil demand was “over,” becoming the first major player to point at the end of an era many thought would last some more decades. Oil consumption may never return to levels seen before the coronavirus crisis took hold, the company said in a report released on September 14.
Even the Organisation of the Petroleum Exporting Countries, or OPEC (of which Brunei is not a member), has conceded that oil demand was in sharp decline and the decades ahead could bring a test for the entire petroleum industry.
Hengyi Industries' existing petrochemical complex at Pulau Muara Besar, Brunei Despite adverse macro-economic conditions, a petrochemical joint venture between Brunei and China, Hengyi Industries, plans to invest about $13.7 billion in the construction of the second phase of its oil refinery facility at Pulau Muara Besar, a large industrial park on an island in Brunei Bay, Xinhua reported. Chen Liancai, Hengyi's chief executive officer, told Xinhua that the construction period is set for three years. Upon completion, the facility will add 14 million tonnes of crude oil processing capacity which would supply both the regional and international markets. Hengyi Industries...
Despite adverse macro-economic conditions, a petrochemical joint venture between Brunei and China, Hengyi Industries, plans to invest about $13.7 billion in the construction of the second phase of its oil refinery facility at Pulau Muara Besar, a large industrial park on an island in Brunei Bay, Xinhua reported.
Chen Liancai, Hengyi’s chief executive officer, told Xinhua that the construction period is set for three years. Upon completion, the facility will add 14 million tonnes of crude oil processing capacity which would supply both the regional and international markets.
Hengyi Industries is a 70:30-joint venture between China’s Zhejiang Hengyi Group and Damai Holdings, a strategic development fund owned by the Brunei government. The company already invested about $3.45 billion in the first phase of its oil refinery and petrochemical site at Pulau Muara Besar. It went full operational in November 2019 with eight million tonnes of crude oil processing capacity per year.
The investment in the second phase is expected “to create jobs in Brunei and boost related local industries,” Chinese company officials said.
Question mark over future global oil demand
However, the announcement comes at a time when the coronavirus is battering the world economy and demand for travel and the volume of consumer goods transport have dropoed sharply, and with it global demand for fuel. It also contradicts the pessimistic forecasts for oil demand in the post-Covid 19 world as global transport is shifting to electric and other alternative power and the era of fossil fuels seem to come slowly to and end.
UK energy giant BP was the first to say that the relentless growth of oil demand was “over,” becoming the first major player to point at the end of an era many thought would last some more decades. Oil consumption may never return to levels seen before the coronavirus crisis took hold, the company said in a report released on September 14.
Even the Organisation of the Petroleum Exporting Countries, or OPEC (of which Brunei is not a member), has conceded that oil demand was in sharp decline and the decades ahead could bring a test for the entire petroleum industry.
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