Company to build diesel processing plant as part of refinery expansion planShell Malaysia will invest RM800mil for the construction of a diesel processing plant as part of its refinery expansion plan here.
The project, which is part of the RM5.1bil worth of proposed investments by Shell in Malaysia for this year, is among the 19 Entry Point Projects (EPP) announced by Prime Minister Datuk Seri Najib Tun Razak in January.
The new plant will enable the refinery, which is licensed to produce 156,000 barrels of oil a day, to vary its feedback options, increase diesel production and improve its margin.
Shell Refining Company managing director Rozano Saad said the new facility would allow the company to be more flexible in managing its crude oil. “We expect the new line to be commissioned by the end of next year ... it will give us more options with our crude,” he told reporters after the groundbreaking ceremony for the new plant by Mentri Besar Datuk Seri Mohamad Hasan.
Rozano said although the refinery was licensed to produce 156,000 barrels per day, output would be determined by demand.
“We have various products with the bulk being for the local market ... but whatever we produce, including at the new plant, will be based on demand,” he said.
Shell Malaysia will invest the remaining RM4.3bil for the expansion of its Bintulu gas-to-liquids plant in Sarawak and for a deepwater development project in Gumusut Kakap, off Sabah. The Port Dickson refinery, located on a 240ha area here, was Shell's first in Peninsular Malaysia.
Shell Malaysia chairman Anuar Taib said the project would help make its operations more efficient as it would enable the refinery to process a wider range of crude oil.
“Today's ceremony marks a significant milestone in the delivery of one of Shell's economic transformation programme projects.
“Global energy demand continues to surge and is set to double in the first half of this century, thanks to improving living standards and population growth,” he said.
Anuar said although the earth's remaining supplies of oil and gas were now located in harder to reach places, such as under deep oceans, Shell would continue to work with its partners to ensure supply was not disrupted.
He said Shell was also finding new ways to make its operations more efficient and offer its customers products that helped them use less energy. Anuar said since setting up operations in Port Dickson in 1963, the refinery had undergone constant upgrading and improvement.
in its facilities and operations.
“Malaysia is one of Shell's heartlands and we are one of the early investors in the country's oil and gas industry...we are also one of the largest, if not the largest foreign taxpayer in the country, contributing over RM1bil annually for the past three years,” he said.
Mohamad said the huge investment by Shell was testimony to its long term commitment in Malaysia.
“Some people often say that many multinational companies are closing to relocate elsewhere.
“On the contrary, we have Shell Refining Company, which is in the top five bracket of most profitable companies in the group, which has put aside a large investment to expand in Malaysia,” he said adding that many other foreign companies have also made enquiries to start operations in the state.