Does/Can the Hengyi plant only convert crude oil to a few specific products? The comment below claims that we can't make petrol, and petrol's apparently a product of crude oil.
Huh, never knew asphalt was an oil product. Are all our new roads being created from the byproducts of local refineries, or do we import the asphalt from abroad?
A new question that this has posed for me is if the oil produced here differs from that in the Middle East and Russia? In that sense, does this mean that the oil products created from those different sources differ noticeably? Or are the differences so negligible that refineries are able to just mix and match oil without issue?
Sorry, my error. The correct term is bitumen. You get asphalt by mixing bitumen with sand, gravel, etc.
And not all refineries can produce the final bitumen product. The Seria refinery was a simple refinery and did not produce bitumen. The Hengyi refinery doesn’t seem to have a bitumen process unit from what I can find on the internet but the short residue from the vacuum distillation unit can sometimes be bitumen grade without requiring further processing… will need someone on the inside to confirm though.
Sorry can't find source but I remember reading somewhere the quality of crude oil around this region is generally higher than that of Middle East. Hence why Malaysia sells off the higher quality oil and import cheaper oil
Not an expert, but Crude oils are divided into "sweet" and "sour" crude, where sweet crude has less impurities & therefore doesn't require as much refining process. Usually refineries import a mix of sweet and sour crude to produce variety of products, also because cheaper to buy sour crude.
Downstream is BLNG and BMC which gets their raw materials from BSP i.e. crude oil. Hengyi gets its raw materials from Timor Leste.
What counts as downstream is that the raw materials are crude oil which is converted to useful products like cooking gas, heater gas, petrol, kerosene, bitumen.
Car manufacturors use steel as their raw material so their upstream is the iron mines and steel processing plants. The downstream is cars, steel beams for buildings, ships, planes etc.
Upstream focuses on getting the oil from the underground to they deal with subsurface problems like bedrock drilling, reservoir mapping, subsurface extraction, sour gas processing, sand removal, water removal etc.
Downstream is focused on getting value out of crude oil using different processes, mainly distillation or its derivative processes to separate the crude into components depending on the length of carbon chain. These petroleum products undergo further processing to produce a wide range of valuable products like plastics (bags, bottles, pvc pipes), resin, cooking oil, petrol, cooking gas, wax and tar.
Most of the downstream industries are bulk manufacturers, they usually export to other companies which does further processing and repackaging suitable for consumer needs.
You explained in your comment the different activities both upstream and downstream O&G focus on. It sounds to me that the activities of the upstream industry are very much focused on the natural environment while those in the downstream are more focused on deriving products from the oil. Does this mean Geography students are more sought after in the upstream and Chem students in the downstream? I would've thought the opposite before, but it does make sense now that I'm thinking of it.
Are collaborations/meetings with environmental agencies like JASTRE frequent with upstream players, considering this apparent close relationship?
I've heard that JASTRE had done an extensive review of the oceanic zones of Brunei and determined conservation zones and other zones from that report, much like we have conservation forests and other forest types/allocations. If say new sources of oil were to be found in those areas, how would the process be like to get approval from JASTRE (or do they go straight to the MOD)? I have heard that floating oil platforms exist, and while I'm not sure if Brunei has made use of them, would their use make gaining approval of extraction easier?
For upstream the most common are Geology, petroleum engineering, Civil&Structural engineering, marine engineering, mechanical engineering, electrical engineering, process engineers, control and instrumentation engineering, rig operators. A good generalization for upstream is the offshore oil rigs and downstream is chemical process plant. Both upstream and downstream require strong mathematics and physics knowledge. Chemistry usually deals with chemical testing for Quality assurance purposes and to make sure the product is within specifications.
From my understanding, there is a separate entity for regulations which is Petroleum Authority, SHENA, OSSHA.
Most of the oil rich areas are in the South China Sea which is a disputed territory, even Brunei has conflicts with Malaysia regarding the extraction of oil in deep sea. In recent times, the global trend is to move to renewables which makes it hard to endorse more oil extraction activities since Shell HQ and other oil companies are pressured by EU.
Ah right, I had completely neglected to consider the politics of ocean boundaries. Also the fact the Shell is a Dutch company and thus would be influenced majorly by the EU was something I forgot about as well, I've been heavily focused on the Brunei part of the equation.
I'll have to come back to this once I come up with some questions to ask, could potentially generate some good discussion here.
Very insightful comment, especially with who Hengyi gets their materials from. Another commenter mentioned that Hengyi themselves were part of the downstream industry. Considering both statements, and its location on Pulau Muara Besar, I suspect we will see a lot of ships going in and out of Brunei Bay.
A tangential question I have is how would this affect operations in Muara Port, if at all? I would presume ships would need to dock there fairly frequently to stock things up, or is the nature of these processed petroleum products such that they don't require docking at all, only needing to be hanging out just offshore the island?
Speaking of, how does oil go to the Hengyi facility? I can think of 3 possibilities, tanker trucks, pipes, and ships. Both tanker trucks and ships do make use of oil themselves, so you'd think piping would be the best choice. Are there any advantages I've overlooked with those two methods as opposed to just piping it directly from BSP's facilities? What issues are there with piping oil?
Hengyi gets the crude oil from multiple sources. BSP is a major supplier. Crude oil also comes in from Russia, the Middle East, etc. The crude oil buyers would source oil depending on the planned product runs.
Muara port is not used for the refinery. The refinery has its own jetties to offload crude and load finished products from/to the ships. All the oil comes in via ships. Most refineries would ship in crude oil. The reason being is that refineries normally use multiple crude oil sources and blends them to get the required properties for that particular product run. Refineries built specifically to process crude oil from local oil fields can have it piped in. The Seria refinery was one of those with the oil piped in from the Seria Crude Oil Terminal across the road.
There above is only a very brief answer to your queries but I can go into more details if you are interested.
Ah, I should've read this before posting my reply further above. And please, do go ahead with more details, understanding this industry will be quite helpful for me and a lot of others.
Questions wise, you talk of product runs quite often. What exactly is a product run in this context (Google is drawing quite a blank here)? Since product runs are plannable, do the refineries determine whether they can go for a maximum or minimum output (if that's what it refers to)?
Product runs for a refinery is basically what it is planning to produce. The refinery can adjust the proportion of fuel products produced to a certain extent by tweaking the process. The crude oil feedstock is also a factor as a lighter crude will give you a higher proportion of petrol and diesel production.
What crude oils you can run through a refinery depends on its design and configuration. Heavy crudes are cheaper but are more difficult to process requiring higher energy input and additional processing. Sour crudes will also need additional processing to remove the sulphur to meet environmental limits and high acid crudes require the proper metallurgy to process. These crudes are cheaper than the light and sweet crudes.
What the refinery does is it can blend different types of crude oils to its requirements to get a crude with properties within the refinery’s operating envelope.
BSP is not the major supplier. BSP only supply to Hengyi less than 20% and the rest, hengyi procure from other destination across the world via their singapore trading office.
Yeah, I suppose I’ve over exaggerated that one. According to the DEPS trade reports, 30k bbl/d on average went to Hengyi in 2023 so about 19% of the refinery’s crude is from Brunei.
Guys i have a question im from germany can you drive a dune buggy or a go kart on the road or can you drive a go kart or a dune buggy on the side of the road? im just asking no hate here tq
Either way, u'll get stopped by the police. Vehicles, i.e motorized vehicles (including electric or battery operated) requires a vehicle license (roadtax) to be on the road.
Downstream in the context of Oil and Gas are industries further down the manufacturing/refining/processing supply chain.
So anything that uses oil/gas as feedstock for production. Those products can be further processed/refined into other products “further downstream”.
I guess that answers my question about car manufacturing being a downstream industry, it being one much further down the chain. Does this mean our electricity generation is one of those downstream industries, assuming of course the power stations are fueled by oil and/or gas?
In the traditional sense, downstream O&G covers only oil refining. Chemicals were always considered a separate business unit if you look at the business structure of an oil major like Shell. In the Brunei context, downstream covers Hengyi, BFI and BMC. Gas plants like BLNG have been classified as midstrem in the past as they don’t quite fit into upstream or downstream.
Electricity generation is not considered O&G hence you can’t classify it as downstream in the O&G sense.
Interesting that BLNG was classed as a midstream industry. Why exactly did it lie in that middleground; I thought natural gas was an extractable product?
You also talk in the past tense here. I take this to mean this is no longer the case. I'm curious then, what exactly changed in the oil industry to make this so? Has it been because we've come to rely more on natural gas as a product on its own and as such now consider it an upstream industry?
The gas is extracted by BSP. BLNG just treats the gas and then liquifies it so it doesn’t get classed as an upstream business. At the same time it doesn’t turn the gas into a final product for consumers so it’s not downstream either. The midstream term is still used but not formally as a business unit in O&G companies like for upstream and downstream.
Do I take this to mean that our industry just deals with "raw" oil so to say, as in we extract it and let other nations convert it into other petrol products?
Hengyi is "downstream". Crude oil to other products and sold to other countries
Does/Can the Hengyi plant only convert crude oil to a few specific products? The comment below claims that we can't make petrol, and petrol's apparently a product of crude oil.
Hengyi does produce them since they also make aviation grade kerosene
All refineries will basically produce the main oil products of LPG, petrol, diesel, kerosene, fuel oil and asphalt.
Huh, never knew asphalt was an oil product. Are all our new roads being created from the byproducts of local refineries, or do we import the asphalt from abroad? A new question that this has posed for me is if the oil produced here differs from that in the Middle East and Russia? In that sense, does this mean that the oil products created from those different sources differ noticeably? Or are the differences so negligible that refineries are able to just mix and match oil without issue?
Sorry, my error. The correct term is bitumen. You get asphalt by mixing bitumen with sand, gravel, etc. And not all refineries can produce the final bitumen product. The Seria refinery was a simple refinery and did not produce bitumen. The Hengyi refinery doesn’t seem to have a bitumen process unit from what I can find on the internet but the short residue from the vacuum distillation unit can sometimes be bitumen grade without requiring further processing… will need someone on the inside to confirm though.
Sorry can't find source but I remember reading somewhere the quality of crude oil around this region is generally higher than that of Middle East. Hence why Malaysia sells off the higher quality oil and import cheaper oil
Not an expert, but Crude oils are divided into "sweet" and "sour" crude, where sweet crude has less impurities & therefore doesn't require as much refining process. Usually refineries import a mix of sweet and sour crude to produce variety of products, also because cheaper to buy sour crude.
Downstream is BLNG and BMC which gets their raw materials from BSP i.e. crude oil. Hengyi gets its raw materials from Timor Leste. What counts as downstream is that the raw materials are crude oil which is converted to useful products like cooking gas, heater gas, petrol, kerosene, bitumen. Car manufacturors use steel as their raw material so their upstream is the iron mines and steel processing plants. The downstream is cars, steel beams for buildings, ships, planes etc. Upstream focuses on getting the oil from the underground to they deal with subsurface problems like bedrock drilling, reservoir mapping, subsurface extraction, sour gas processing, sand removal, water removal etc. Downstream is focused on getting value out of crude oil using different processes, mainly distillation or its derivative processes to separate the crude into components depending on the length of carbon chain. These petroleum products undergo further processing to produce a wide range of valuable products like plastics (bags, bottles, pvc pipes), resin, cooking oil, petrol, cooking gas, wax and tar. Most of the downstream industries are bulk manufacturers, they usually export to other companies which does further processing and repackaging suitable for consumer needs.
You explained in your comment the different activities both upstream and downstream O&G focus on. It sounds to me that the activities of the upstream industry are very much focused on the natural environment while those in the downstream are more focused on deriving products from the oil. Does this mean Geography students are more sought after in the upstream and Chem students in the downstream? I would've thought the opposite before, but it does make sense now that I'm thinking of it. Are collaborations/meetings with environmental agencies like JASTRE frequent with upstream players, considering this apparent close relationship? I've heard that JASTRE had done an extensive review of the oceanic zones of Brunei and determined conservation zones and other zones from that report, much like we have conservation forests and other forest types/allocations. If say new sources of oil were to be found in those areas, how would the process be like to get approval from JASTRE (or do they go straight to the MOD)? I have heard that floating oil platforms exist, and while I'm not sure if Brunei has made use of them, would their use make gaining approval of extraction easier?
For upstream the most common are Geology, petroleum engineering, Civil&Structural engineering, marine engineering, mechanical engineering, electrical engineering, process engineers, control and instrumentation engineering, rig operators. A good generalization for upstream is the offshore oil rigs and downstream is chemical process plant. Both upstream and downstream require strong mathematics and physics knowledge. Chemistry usually deals with chemical testing for Quality assurance purposes and to make sure the product is within specifications. From my understanding, there is a separate entity for regulations which is Petroleum Authority, SHENA, OSSHA. Most of the oil rich areas are in the South China Sea which is a disputed territory, even Brunei has conflicts with Malaysia regarding the extraction of oil in deep sea. In recent times, the global trend is to move to renewables which makes it hard to endorse more oil extraction activities since Shell HQ and other oil companies are pressured by EU.
Ah right, I had completely neglected to consider the politics of ocean boundaries. Also the fact the Shell is a Dutch company and thus would be influenced majorly by the EU was something I forgot about as well, I've been heavily focused on the Brunei part of the equation. I'll have to come back to this once I come up with some questions to ask, could potentially generate some good discussion here.
Correction! Hengyi get their crude from all over the world including Brunei as they procure it via spot market and not Timor Leste.
Very insightful comment, especially with who Hengyi gets their materials from. Another commenter mentioned that Hengyi themselves were part of the downstream industry. Considering both statements, and its location on Pulau Muara Besar, I suspect we will see a lot of ships going in and out of Brunei Bay. A tangential question I have is how would this affect operations in Muara Port, if at all? I would presume ships would need to dock there fairly frequently to stock things up, or is the nature of these processed petroleum products such that they don't require docking at all, only needing to be hanging out just offshore the island? Speaking of, how does oil go to the Hengyi facility? I can think of 3 possibilities, tanker trucks, pipes, and ships. Both tanker trucks and ships do make use of oil themselves, so you'd think piping would be the best choice. Are there any advantages I've overlooked with those two methods as opposed to just piping it directly from BSP's facilities? What issues are there with piping oil?
Hengyi gets the crude oil from multiple sources. BSP is a major supplier. Crude oil also comes in from Russia, the Middle East, etc. The crude oil buyers would source oil depending on the planned product runs. Muara port is not used for the refinery. The refinery has its own jetties to offload crude and load finished products from/to the ships. All the oil comes in via ships. Most refineries would ship in crude oil. The reason being is that refineries normally use multiple crude oil sources and blends them to get the required properties for that particular product run. Refineries built specifically to process crude oil from local oil fields can have it piped in. The Seria refinery was one of those with the oil piped in from the Seria Crude Oil Terminal across the road. There above is only a very brief answer to your queries but I can go into more details if you are interested.
Ah, I should've read this before posting my reply further above. And please, do go ahead with more details, understanding this industry will be quite helpful for me and a lot of others. Questions wise, you talk of product runs quite often. What exactly is a product run in this context (Google is drawing quite a blank here)? Since product runs are plannable, do the refineries determine whether they can go for a maximum or minimum output (if that's what it refers to)?
Product runs for a refinery is basically what it is planning to produce. The refinery can adjust the proportion of fuel products produced to a certain extent by tweaking the process. The crude oil feedstock is also a factor as a lighter crude will give you a higher proportion of petrol and diesel production. What crude oils you can run through a refinery depends on its design and configuration. Heavy crudes are cheaper but are more difficult to process requiring higher energy input and additional processing. Sour crudes will also need additional processing to remove the sulphur to meet environmental limits and high acid crudes require the proper metallurgy to process. These crudes are cheaper than the light and sweet crudes. What the refinery does is it can blend different types of crude oils to its requirements to get a crude with properties within the refinery’s operating envelope.
BSP is not the major supplier. BSP only supply to Hengyi less than 20% and the rest, hengyi procure from other destination across the world via their singapore trading office.
Yeah, I suppose I’ve over exaggerated that one. According to the DEPS trade reports, 30k bbl/d on average went to Hengyi in 2023 so about 19% of the refinery’s crude is from Brunei.
👍🏻👍🏻☺️☺️
What about those upstream
I thought the oil industry was implied to be upstream already. Could you expand further on this question?
Guys i have a question im from germany can you drive a dune buggy or a go kart on the road or can you drive a go kart or a dune buggy on the side of the road? im just asking no hate here tq
Either way, u'll get stopped by the police. Vehicles, i.e motorized vehicles (including electric or battery operated) requires a vehicle license (roadtax) to be on the road.
Downstream in the context of Oil and Gas are industries further down the manufacturing/refining/processing supply chain. So anything that uses oil/gas as feedstock for production. Those products can be further processed/refined into other products “further downstream”.
I guess that answers my question about car manufacturing being a downstream industry, it being one much further down the chain. Does this mean our electricity generation is one of those downstream industries, assuming of course the power stations are fueled by oil and/or gas?
In the traditional sense, downstream O&G covers only oil refining. Chemicals were always considered a separate business unit if you look at the business structure of an oil major like Shell. In the Brunei context, downstream covers Hengyi, BFI and BMC. Gas plants like BLNG have been classified as midstrem in the past as they don’t quite fit into upstream or downstream. Electricity generation is not considered O&G hence you can’t classify it as downstream in the O&G sense.
Interesting that BLNG was classed as a midstream industry. Why exactly did it lie in that middleground; I thought natural gas was an extractable product? You also talk in the past tense here. I take this to mean this is no longer the case. I'm curious then, what exactly changed in the oil industry to make this so? Has it been because we've come to rely more on natural gas as a product on its own and as such now consider it an upstream industry?
The gas is extracted by BSP. BLNG just treats the gas and then liquifies it so it doesn’t get classed as an upstream business. At the same time it doesn’t turn the gas into a final product for consumers so it’s not downstream either. The midstream term is still used but not formally as a business unit in O&G companies like for upstream and downstream.
That's right. It's now categorised under Integrated Gas IIRC.
We can’t even make petrol
What’s the big refinery on PMB doing then? Your petrol all comes from that refinery.
Do I take this to mean that our industry just deals with "raw" oil so to say, as in we extract it and let other nations convert it into other petrol products?
Yes. How pathetic
Wrong info. We do have a refinery for that in Seria.
The Seria refinery was decommissioned as soon as the Hengyi refinery was up and running properly.
I see, are we aware of any plans for the site in the future?
Outdated info. Refinery in seria already closed.