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Energy
Developments in the energy sector
Danial Norjidi
Photo courtesy Ministry of Energy
Since the discovery of oil in 1929, the oil
and gas industry has grown with strength
to become the largest and most mature
economic sector in Brunei Darussalam.
The sector accounted for nearly 60 per
cent of the country’s gross domestic product
(GDP) and 90 per cent of exports in 2019.
The Ministry of Energy has played
a pivotal role in the development of
hydrocarbon reserves as the country’s main
source of revenue. In the recent years,
the oil and gas industry has seen major
milestones particularly in the expansion and
diversification of its downstream sector.
According to a statement from the
ministry, “This is in line with His Majesty
Sultan Haji Hassanal Bolkiah Mu’izzaddin
Waddaulah ibni Al-Marhum Sultan Haji Omar
‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan
and Yang Di-Pertuan of Brunei Darussalam’s
titah in conjunction with His Majesty’s 71
st
birthday celebration, whereby His Majesty
highlighted the need for continuous efforts
to boost economic growth through the
entries of foreign direct investments (FDIs)
and growth of micro, small and medium
enterprises (MSMEs). Towards achieving
economic growth, His Majesty also stressed
greater collaboration between the private
and public sectors. As such, these remain at
the heart of the Ministry of Energy’s mission.”
The most significant recent downstream
The oil and gas industry
has seen major
milestones particularly
in the expansion and
diversification of its
downstream sector.
project development is the full commercial
operation of the Pulau Muara Besar (PMB)
RefineryandPetrochemical Plant inNovember
2019. The PMB Refinery and Petrochemical
Plant is the largest foreign direct investment
project in Brunei Darussalam, with the
capacity to refine 175,000 barrels per day of
crude oil per year and generate eight million
tonnes of petroleum and petrochemical
products per year.
On May 15, 2020, Hengyi Industries
Sdn Bhd, as operator of the refinery and
petrochemical plant, started its first supply of
petroleum products for the domestic market
as a part of its commercial agreement signed
with Brunei Shell Marketing Company Sdn
Bhd (BSM).
“This enhances self-sufficiency and stable
supply of essential petroleum products for
the nation,” shared the ministry.
Towards the expansion of the downstream
energy sector and to further explore
opportunities in alternative energy sources,
the ministry continues to facilitate the global
hydrogen supply chain demonstration project
jointly conductedbetweenBrunei Darussalam
and Japan, and operated by the Advanced
Hydrogen Energy Chain Association for
Technology Development (AHEAD).
Aimed at realising global hydrogen
transport and supply technology for full-
scale hydrogen power generation by 2030,
the project reached a significant milestone
after successfully transporting hydrogen
produced from the Sungai Liang Industrial
Park (SPARK) to Japan in the form of a stable
organic compound shipped via conventional
shipping methods, since December 2019.
This hydrogen was successfully extracted
and supplied to Japanese powerplants onMay
25, 2020. This landmark achievement marks
the success of the world’s first international
hydrogen supply chain.
The ministry stated that, moreover, the
Brunei Fertilizer Industries’ ammonia and
urea production plant will also add to the
expansion of the country’s downstream
energy portfolio. In 2019, the construction
of the project generated local employment
of 411. The plant is scheduled to start
operations in the second quarter of 2021 with
a production capacity of 3,900 metric tonnes
per day of urea.
“In ensuring the development of the coun-
try’s energy sector, the ministry is committed
to maximising opportunities for locals. With
a vision for a sustainable and diverse energy
sector to support the long-term growth and
prosperity of the nation, the ministry has im-
plemented several directives and initiatives.”
The ministry issued the Local Business
Development (LBD) Directives aimed at
maximising local spending in the form of
generating local job opportunities and the
local use of goods and services. In 2019, a
number of spin-off opportunities driven by
the Ministry of Energy had been executed,
which contributed to 300 job opportunities
for locals.
The Bruneianisation Directive for the oil
and gas sector was also issued to enhance
succession planning, progression and
employment opportunities for Bruneians,
while
developing
highly
competent
Bruneians at all organisational levels. The
overall percentage of Bruneians among in
the workforce of oil and gas operators was
reported at 70 per cent as of December 2019.
It was also shared that future downstream
developments and ongoing upstream oil
and gas activities will bring in new skills and
technology to Brunei Darussalam’s workforce
and market.
“The ministry has been gearing the
local talent to meet this significant demand
through collaborative efforts between
various ministries and agencies, such as with
the Manpower Planning and Employment
Council (MPEC), Ministry of Education
(MoE), industry representatives and other
stakeholders. Other upcoming oil and gas
activities include increasing exploration
activities, accelerating development of new
oil and gas fields especially in deep-water
areas.”
The past year has also seen the recent
establishment of the Petroleum Authority
of Brunei Darussalam from December
31, 2019, a statutory body tasked by the
Ministry of Energy to oversee operations and
infrastructure in the upstream, midstream
and downstream oil and gas sector.
“Its establishment serves as a step towards
further strengthening the regulation of the
industry to ensure prudent and sustainable
utilisation and development of the country’s
oil and gas resources for a more resilient
and stable oil and gas industry,” added the
ministry.
Contributing to the nation
James Kon
Photo courtesy Hengyi
Hengyi Industries Sdn Bhd achieved notable
new milestones recently, including starting
domestic supply of refined fuel products.
Hengyi started its first supply of petroleum
products for domestic market distribution
on May 15, 2020 as a part of a commercial
agreement signed between Hengyi and
Brunei Shell Marketing Company Sdn Bhd
(BSM) on September 18, 2019 signifying a
new milestone in maintaining the domestic
supply security and reliability.
Another milestone was achieving full
load of operation. The Pulau Muara Besar
(PMB) Refinery and Petrochemical Plant
commenced operation in November 2019
with a refinery capacity of 175,000 barrels
per day equivalent to eight million tonnes per
annum (MTPA).
As of May 2020, the refinery has imported
3.22 million tonnes of crude oil and exported
3.1 million tonnes of refined fuel products
including Gasoline (0.96 mil ton), Jet fuel
(0.32 mil ton), Diesel (0.95 mil ton), LPG
(0.26 mil ton), Paraxylene (0.51 mil ton) and
Benzene (0.11 mil ton).
In response to
the COVID-19 pandemic, and in line with the
Ministry of Energy’s effort in ensuring the
business continuity of the oil and gas sector,
Hengyi activated its Standard Operating
Procedure and Business Continuity Plan.
This is to ensure uninterrupted operation
of the plant and to protect the safety and
health of all its staff and contractors.
In addition, as a part of its corporate
social responsibility, the company donated
USD1 million worth of medical supplies and
equipment to assist the Government of
Brunei Darussalam in tackling the COVID-19
pandemic. The donation included 69 units
of electric hospital beds and five units of
ventilators, while the remaining funds were
transferred to the Brunei COVID-19 Relief
Fund.
As the biggest foreign direct investment
from China in Brunei Darussalam, Hengyi has
contributed in the national development and
also the national agenda of diversification
from dependence on oil and gas as well as
Vision 2035.
In Q4 2019, the Department of Economic
Planning and Statistics calculated that Hengyi
contributed to two per cent (BND 110 million)
of Brunei Darussalam’s GDP. Q4 2019 also
sawHengyi contribute to 17 per cent of Brunei
Darussalam’s export value (BND603 million),
with a total export of around 680,000 tonnes
of petroleum products.
In Q1 2020, Hengyi exported 1.8 million
tonnes of products valued at BND1.4 billion.
Hengyi exports its products to, but not
limited to, Australia, China, Singapore, the
Philippines, Vietnam and the United States of
America.
Continue to page 24
Borneo Bulletin, Wednesday July 15, 2020
Royal Birthday SPECIAL