M’sian firm eyes part in $3b PMB job
PULAU Muara Besar's development is taking another progressive step forward, with a Malaysian company on the verge of securing a portion of a construction deal as part of bigger plans to build an oil refinery for Brunei.
TRC Synergy Bhd (Malaysia), which has recently bought a 26 per cent stake in PetroBru Sdn Bhd, hopes to secure part of a construction deal, worth US$3 billion, for an oil refinery in the sultanate.
Reports from Malaysia stated that while the company would not be involved in the entire construction, it has expressed an interested in setting up farm tanks, said Chief Financial Officer Yeoh Sook Keng.
PetroBru (B) Sdn Bhd has been given the green light to conduct a feasibility study on the viability of building and operating a crude oil storage and refinery in the island off Brunei's bay.
It is expected to sign a memorandum of understanding with the Brunei government soon, Yeoh said in an interview.
Pulau Muara Besar has been earmarked as Brunei's new deep-water hub for regional markets.
The planned refinery will have an initial capacity of 200,000 barrels a day, with maximum capacity of 500,000 barrels per day.
Meanwhile, the storage facility is expected to be capable of handling two million cubic metres with initial space of one million, he added.
TRC's Executive Director Datuk Abdul Aziz Mohamad said the company looks to benefit from spillover activities from the refinery, such as infrastructure and property development.
Abdul Aziz also indicated that the project will only start contributing revenue two years after construction works commence, and explained that the feasibility study would take six to eight months, followed by the engineering, procurement and construction work, which is expected to take another year.
The refinery will contribute revenue in five years' time when it commences production, he added.
"Construction will still be our main earnings contributor in the next two to three years but we can't rely on it. By then, PetroBru will see work in full swing," he said.
TRC does not intend to raise its stake in the holding company.
It might, however, set up a joint-venture company with PetroBru to secure the construction portion of the project, Abdul Aziz added.
According to the Oil and Gas Journal, as of January 2007, Brunei has 8,600 billion barrels per day of refining capacity at its current facility, which is operated by Brunei Shell Petroleum in Seria.
Industry insiders say that this refinery meets roughly a half of Brunei's domestic petroleum product needs.
In order to meet domestic demand, Brunei actually imports small amounts of petroleum products from neighbouring countries.
The planned refinery will be in an ideal spot as its strategic location positions itself near to China, Vietnam and the Middle East — an advantage for setting up its deep-water hub.
The Brunei Times