No “syndrome” of oil refineries in Vietnam, lawmakers reassured

24^th Nov 2013

At a recent addressing at the National Assembly, Vietnam Prime Minister reassured the lawmakers on their concerns over the so-called oil refinery “syndrome” in the country that implicated that the oil refining projects Vietnam are blooming unnecessarily. The Prime Minister said there was no such syndrome except for the fact that the state-owned Thai PTT's proposed mega-refinery to be located in Binh Dinh province is the only one so far not included in the master plan [for oil refinery and petrochemical projects].

“This project is invested by a big Thai oil refining corporation and it’s just in the pre-feasibility study stage; after the study, only when both economic and social effectiveness is proven, then it would be included in the national master plan” he further explained.

He also cited some facts that the Dungquat oil refinery is running at its full capacity of 6 million tones/year and brings about obvious effectiveness; and Russian Gazprom and Vietnamese PVN already inked a cooperation agreement on raising its capacity to 10 million tons/year during a recent visit by Russian president to Vietnam. The work will also upgrade the technical efficiency of motor fuel production to meet the Euro-5 standard. “We basically do not have to pour more money to raise Dungquat refinery’s capacity because its share shall be sold to Gazprom [and Vietnam will use the capital from such sales]”, he acknowledged.

Meanwhile, PetroVietnam and its partners began construction at the 200,000 b/d Nghi Son refinery and petrochemical complex last month. This project is jointly invested by Vietnamese PVN (25% of shares), an Kuweit Petroleum Corporation (35%) and Mitsui Petrochemical Inc (40%) with the total investment estimated at US$ 9 billion. The refinery is planned to finish construction within 40 months and to start commercial operation in 2017. According to Prime Minister Dung, this project will be also very effective because the Kuwait pledges to supply 100% of the input crude oil for the refinery during its lifetime.

Two other proposed 200,000 b/d refinery and petrochemical projects -- PVN's Long Son complex in the southern province of Ba Ria Vung Tau and state-owned Petrolimex's Nam Van Phong project in the central province of Khanh Hoa -- are looking for foreign investors, the prime minister said. Meanwhile, the refinery project in Can Tho (2 million tons per year) is said to face difficulties in financial arrangement and would be likely to be revoked.

JGC led JV Awarded Contract for Refinery and Petrochemical Complex in Vietnam

Jan 2013

               

Yokohama Japan – JGC Corporation (JGC), Chiyoda Corporation (Chiyoda), Technip, and South Korean contractors GS Engineering & Construction (GS) and SK Engineering & Construction (SK) today jointly announced that the joint venture, formed by JGC, Chiyoda, Technip, GS and SK, has received notification of the award of a contract for the Nghi Son refinery and petrochemicals complex in the Nghi Son economic zone in northern Vietnam. The contract was awarded by the Nghi Son Refinery Petrochemical Limited Liability Company, a joint venture between Idemitsu Kosan Co., Ltd (35.1%), Kuwait Petroleum International (35.1%), Vietnam Oil and Gas Corporation (25.0%), and Mitsui Chemicals, Inc. (4.8%). The lump-sum turnkey contract calls for the engineering, procurement, construction (EPC) and commissioning work for an oil refinery with a production capacity of 200,000 barrels per day. The complex, scheduled for completion in late 2016, will be located in the Thanh Hoa Province in Vietnam, 200 km south of the capital city of Hanoi. The value of the contract was not disclosed.

This project, which is being promoted by Idemitsu Kosan Co., Ltd., Kuwait Petroleum International, Vietnam Oil and Gas Corporation, and Mitsui Chemicals, Inc. is a grassroots oil refinery and petrochemical complex project in Vietnam. This project will be the second constructed in Vietnam, and is aimed at satisfying increasing demands for petroleum products to support the progress of Vietnam's motorization, as well as produce petrochemicals for export. Together with Vietnam's first refinery, the Dung Quat refinery (constructed by a consortium of JGC, Technip and others, and completed in 2009), the Nghi Son refinery and petrochemical complex will be a major pillar supporting the country's economic development.

JGC has been targeting marketing activities toward Southeast Asian countries, including Vietnam, and has been concurrently working on strengthening and expanding JGC Vietnam, an EPC subsidiary of JGC established in Vietnam in 2009. Part of JGC's portion of this project is scheduled to be constructed by JGC Vietnam.

JGC plans to become involved in many more oil refining and petrochemicals projects in Vietnam in the future. JGC has been responsible for the construction of more than fifty oil refineries, and JGC and JGC Vietnam are focusing marketing activities on Southeast Asia in hopes of contributing to building Vietnam's industrial base and furthering economic development.

Source: JGC