Can Tho oil refinery alive

A local  firm has found a foreign partner to salvage its $350 million oil refinery project in southern city of Can Tho.

Vien Dong Investment and Trade Corporation’s general manager Nguyen Van Duc told VIR that he had got Taiwan’s Crystal Future Incorporation onboard to co-develop the Can Tho refinery at the O Mon Industrial Park.

Duc presented a letter of confirmation from the Far East National Bank Ho Chi Minh City branch to express its interest in providing Vien Dong the financial support up to $150 million, to fund the project’s first phase.

Duc said with the appearance of the new partner, the investor would set up documentation and implement procedures for adjusting the investment certificate and submit it to competent bodies before September 30, 2010.

The ill-fated Can Tho refinery received an investment licence in May, 2008 with $538 million in investment to cover 250 hectares.

The joint venture was established between the United States-based Semtech Limited B.V.Island and Vien Dong Investment and Trade Corporation. However, due to the global financial crisis, the foreign partner withdrew from the project late last year. This problem forced the investors to scale down the project to 50ha, with capital of $350 million.

However, the project was on the verge of its certificate revoked because the foreign investor in December last year decided to withdraw from the project, blaming financial difficulties.

If the project goes smoothly this time, Duc said the refinery would have an annual capacity of two million tonnes and meet 50 per cent of the Mekong Delta’s petroleum demand.

Despite being Southeast Asia’s third largest crude oil exporter, Vietnam entirely relies on oil product imports.

Vietnam only has one refinery operating in the central Quang Ngai province, Dung Quat with an annual refining capacity of 6.5 million tonnes of crude oil.

The second one, Nghi Son, is under the construction in the central Thanh Hoa province with investment capital of $6.2 billion and has refinery capacity of 10 million tonnes of crude oil per year. This refinery is expected to be put into operation in 2013.

Meanwhile, PetroVietnam is also selecting partners for the $7 billion Long Son refinery. If it goes smoothly the refinery could start operations in 2020 with the capacity of 10 million tonnes, or about 200,000 barrels per day.