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China’s Hengyi pushes ahead with Brunei oil refinery expansion

Alfred Cang / Bloomberg
Alfred Cang / Bloomberg • 2 min read
China’s Hengyi pushes ahead with Brunei oil refinery expansion
The company will launch the second phase of its Pulau Muara Besar refining and petrochemical complex
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(Jan 6): China’s Hengyi Petrochemical Co will embark on a long-planned expansion of its Brunei oil refinery, more than doubling its capacity in the country and intensifying competition in global markets for fuels and plastics.

The company will launch the second phase of its Pulau Muara Besar refining and petrochemical complex, which it has operated since late 2019, with a view to finishing construction by the end of 2028, according to a statement on Tuesday (Jan 6). Hengyi’s Brunei unit has secured tax incentives from local authorities and financing from lenders, it said.

The plant’s capacity has been adjusted lower to 12 million tonnes a year, from an earlier plan of 14 million tonnes when the project was announced in 2020. On completion, it will push the Brunei unit’s total capacity to 20 million tonnes, producing mainly diesel, paraxylene, benzene, polypropylene and other higher-value refined oil and chemical products.

Global oil refining capacity is set to rebound this year after shrinking in 2025, according to BloombergNEF. Closures in Europe and North America bolstered margins in the second half of the year, allowing for more capacity in Asia.

Still, refiners in Southeast Asian countries have been challenged in recent years by rapid capacity growth in the region, driven largely by China.

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