This article first appeared in The Edge Financial Daily on January 17, 2019

KUALA LUMPUR: Hengyuan Refining Co Bhd has approved the full fund release amounting to US$66.4 million (RM272.9 million) for the H2GEN project, which will supply its refinery with 30 tonnes/day of hydrogen.

Hengyuan said in a Bursa Malaysia filing yesterday the project will be executed within its refining complex in Port Dickson, Negeri Sembilan.

“The H2GEN project is undertaken to supply the refinery with 30 tonnes/day of hydrogen for hydro desulfurisation unit No 2 and the extractive desulfurisation hydro-treating process to meet the 10 parts per million by weight sulphur specification.

“The refinery will be short of hydrogen upon Euro5 gas oil specification implementation in September 2020. The H2GEN project is expected to start up in September 2020 to coincide with the Euro5 gas oil legislated date. The project will be financed using a mix of cash flow generated from operations and further drawdowns of existing loans,” Hengyuan said.

In a separate statement, Hengyuan said the primary objective of the H2GEN project, which involves the construction of a hydrogen manufacturing unit (HMU), is to supply the refinery with 30 tonnes/day of hydrogen for hydro-treating processes to reduce the sulphur content in the company’s petrol and diesel products.

“Hengyuan’s refinery currently relies solely on our platformer unit for the manufacturing of hydrogen. The installation of the HMU is crucial to expand our hydrogen-production capacity and also provides a second source of hydrogen, thus improving our resilience and reliability as a key supplier of products to the Malaysian market,” Hengyuan chairman Wang YouDe said in the statement.