Hengyi Petrochemical Co., Ltd. (hereinafter referred to as “Hengyi Petrochemical Co., Ltd.” “Yi Petrochemical”) issued an announcement on the evening of September 15, saying that in order to solve fundamental problems such as polyester raw materials and further expand, strengthen and refine the petrochemical industry, the company’s subsidiary Hengyi Industrial (Brunei) Co., Ltd. (hereinafter referred to as “Hengyi Brunei”) plans to invest US$13.653 billion (approximately 92.410 billion yuan) in the construction of the second phase of the PMB petrochemical project (hereinafter referred to as the “Brunei Refining Phase II Project”). The investment amount is estimated to be US$13.653 billion.
The second phase of the PMB petrochemical project that Hengyi Brunei plans to invest US$13.653 billion in is located in Muara Island, Brunei Darussalam. The project mainly includes “refining, aromatics “, ethylene, polyester”, the four related industrial chains are highly integrated. Including 14 million tons/year oil refining, 2 million tons/year paraxylene, downstream 2.5 million tons/year PTA, 1 million tons/year PET, 1.65 million tons/year ethylene and downstream deep processing, as well as supporting storage and transportation, public works and Corresponding auxiliary facilities.
The construction period of the second phase of the PMB petrochemical project is 3 years. After the project is completed, the factory will have an average annual increase in operating income of US$11.044 billion and an average annual increase in net profit of US$1.716 billion. , the project’s financial internal rate of return is 18.67%, and the investment payback period is 7.25 years.
After the project is completed, Hengyi Petrochemical will further improve the integration of the industrial chain and the advantages of scale, which will help reduce the company’s product production costs and ensure the stability of raw material supply.
Public information shows that Yisheng Petrochemical is the leading PTA company in China, with a production capacity of 13.5 million tons, accounting for 28% of the country’s total production capacity. Yisheng Petrochemical is the PTA production entity of Hengyi Petrochemical, including Zhejiang Yisheng, Dalian Yisheng Chemical, and Hainan Yisheng. Hengyi Petrochemical holds 70% of the equity of Zhejiang Yisheng, 25.38% of Dalian Yisheng and 42.5% of Hainan Yisheng, with an equity production capacity of 6.22 million tons.
In November 2019, Hengyi Petrochemical Brunei PMB Petrochemical 8 million tons refining project was successfully put into operation, marking the upstream and downstream of the company’s “refining-PX-PTA-polyester” The integrated industrial chain is completely opened up. Hengyi Brunei Refining and Chemical is a key project of my country’s “One Belt and One Road”. It is located in Muara Island, Brunei Darussalam, with a total investment of US$3.445 billion. Hengyi Co., Ltd. and the Brunei Government Industrial Fund hold 70% and 30% of the shares respectively. , management rights belong to Hengyi Petrochemical. The 8 million tons of crude oil uses 3 million tons of Brunei light oil, 3.3 million tons of Qatar crude oil and 1.7 million tons of Middle East condensate. The project plans to produce 1.5 million tons of PX, 480,000 tons of benzene, 2.62 million tons of gasoline, 1.17 million tons of jet fuel, 1.74 million tons of diesel, and 560,000 tons of LPG annually. In addition to meeting Brunei’s local needs, the oil and gas finished products are also sold to Southeast Asian countries. 1.5 million tons of PX can meet the company’s own PTA needs. In addition, Brunei’s second phase 14 million tons refining and chemical project signed a memorandum of understanding in September 2017 and plans to produce 1.5 million tons of ethylene and 2 million tons of PX. Once put into operation, the unit production cost will be further reduced.
Huaan Securities analyst Ren Zhiqiang introduced that Brunei’s annual crude oil production is 44 million barrels. Based on a simple conversion of 40 US dollars per barrel, the crude oil output value is 1.8 billion US dollars, accounting for 10% of the national GDP. 15%. If refined oil and natural gas are included, its GDP share will reach a higher level and it is a pillar industry of the country. The government actively introduces Hengyi Petrochemical to invest in refineries, aiming to increase the added value of products and share its profits through equity investment instead of taxation. Therefore, there is no value-added tax, consumption tax, business tax and surcharges in Brunei refineries. , 18.5% income tax enjoys an 11-year tax exemption, and the longest tax period can be extended to 24 years. This model unifies the interests of enterprises and the government, thereby benefiting from policy protection.
Compared with domestic refining and chemical companies, the refined oil and gas produced in Brunei is closer to the market where it is sold. Currently, my country has overcapacity in refining and refined oil exports have continued to increase in recent years. The growth rates of refined oil exports in 2017, 2018 and 2019 were 7.96%, 12.42% and 14% respectively. Southeast Asia is one of the few regions in the world where the supply and demand of refined oil products is tight, and it has now become the main destination for my country’s refined oil exports. Among them, Singapore accounts for more than 60% of my country’s gasoline exports, and Southeast Asian countries such as Indonesia and Vietnam are also important export destinations for gasoline. Diesel export destinations are relatively scattered, and Southeast Asia is an important route. Brunei is located in the core area of Southeast Asia. It is 2,500 kilometers away from Singapore and has a transportation cost advantage over the main domestic production areas.
Ren Zhiqiang said that of the 8 million tons of raw oil produced by Yisheng Petrochemical, 3 million tons provided by Brunei can be transported directly through pipelines, and the remaining 5 million tons of Middle Eastern crude oil is also cheaper than domestic refining. Chemical enterprises have obvious cost advantages. The transportation cost of a single ton of crude oil in the Brunei project is about US$8, which is a greater advantage than the freight of domestic refineries of about US$16.5/ton, saving US$68 million in freight per year. In addition, the project is equipped with its own power plant, power supply and steam. The company uses Indonesian coal, which is more than 40% cheaper than the cost of coal used in domestic refineries, giving it a significant cost advantage in raw and auxiliary materials.
From observation, the output of the Brunei project is composed of: 1.5 million tons of PX, 480,000 tons of benzene, 2.62 million tons of gasoline, 1.17 million tons of jet fuel, 1.74 million tons of diesel, LPG 560,000 tons. Calculated based on the average price in 2019: gasoline, diesel, kerosene, LPG and PX revenue accounted for 30%, 19%, 13%, 6% and 26% respectively, and the total revenue of oil and gas products accounted for more than 70%. Overall, it is more like refinery.
With 2016-201The average price of oil and gas products and chemical products in Singapore was backtested in 9 years. Ren Zhiqiang introduced that the average annual revenue and net profit of the Brunei project were 35.2 billion and 5.2 billion respectively, and the net profit of a single ton of refining was in the range of 470-770 yuan. Considering that the global economy has been disrupted by the COVID-19 epidemic this year, based on a net profit of 400 yuan/ton, Yisheng Petrochemical’s Brunei project can contribute 3.2 billion yuan.
The financial report shows that in the first half of 2020, Yisheng Petrochemical achieved revenue of 39.417 billion yuan, a year-on-year decrease of 5.55%; net profit was 1.902 billion yuan, a year-on-year increase of 48.99%. During the reporting period, , the Brunei refining and chemical project is operating stably, producing 3.09 million tons of refined products and 940,000 tons of chemicals in the first half of the year. Against the background of plummeting oil prices and a sharp narrowing of overseas refining price differences, the company promptly increased diesel production and reduced aviation kerosene production, achieving a net profit of 560 million yuan.
Fu Kaiming, a researcher at Everbright Securities, said that compared with other leading private polyester companies, Yisheng Petrochemical covers filament, staple fiber and bottle flakes in the polyester category. It is more comprehensive and has a stronger ability to withstand fluctuations in a single product cycle. In addition, Hengyi Group holds 2.49% of Tongkun shares, which reflects the major shareholder’s new ideas on future cooperation and competition in the polyester industry chain. </p
