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Hengyuan Refining flags revenue impact after cracking unit shutdown

Hengyuan Refining Co. expects an unplanned shutdown of its long residue catalytic cracking unit (LRCCU) to impact its revenue, the company said in a bourse filing late on Thursday.

Hengyuan, a subsidiary of China's Shandong Hengyuan Petrochemical Co., said it planned to shut down the unit for inspection and repairs after a leakage was found at its carbon monoxide boiler on Wednesday. The LRCCU processes residue fuel into gasoline and light cycle oil.

Production at the Port Dickson-based refinery on Malaysia's west coast will be affected during the shutdown.

"Given current uncertainties, the financial impact of this incident cannot be reliably estimated at this point, but is expected to be material for the company," Hengyuan said. The company said it would implement measures to ensure there was no major disruption of production supply to its customers during the shutdown.

Hengyuan has offered up to two 15,000-metric ton (t) cargoes of straight-run fuel oil to load in the first 10 days of July, two sources with knowledge of the matter said, attributing the sale to the unit's outage.

The company has sought to buy at least one 15,000-t cargo each of gasoil and 95-octane gasoline for prompt delivery in the next two weeks, a third source who received the enquiry said.

The company did not immediately respond to a request for comment on its fuel sale and purchase.

The Port Dickson refinery has a crude processing capacity of 120,000 bpd, according to the company website.

(Reporting by Rozanna Latiff in Kuala Lumpur and Trixie Yap in Singapore; Editing by Sherry Jacob-Phillips)


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