Idemitsu Kosan, Kuwait Petroleum International to distribute fuel in Vietnam

Nghi Son oil refinery and petrochemical complex as of April 2016 - source Dantri

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According to a press release posted on Idemitsu’s website, the joint venture, named “Idemitsu Q8 Petroleum Limited Liability Company”, will operate in the import, wholesale and retail of petroleum products, mainly through the construction and management of service stations (SS), across Vietnam. The products will come from the upcoming Nghi Son complex in Vietnam’s central province of Thanh Hoa, where Idemitsu and KPI have a stake.

Through the establishment of a petroleum product distribution company, the two companies will supply to the growing Vietnamese market, “where demand for petroleum products is expected to follow a steady upward trend.”

According to the Ministry of Industry and Trade’s (MoIT) data, as of now in Vietnam there are 24 fuel wholesalers, which import fuel or buy it from the country’s sole operating refinery Dung Quat, and sell in the domestic market.

News of Idemitsu and KPI’s move has been met with the strong support from people who made comments on local online newspapers that they wanted another option.

Idemitsu Kosan Co. Ltd. operates in oil refining and manufacturing and sale of petrochemical products as well as exploration, development, and extraction of oil, coal, geothermal energy, and other mineral resources. The company has been pushing ahead with the establishment of a foundation for the petroleum products business that covers supply and sales operations in growing overseas markets centering on Pacific Rim countries.

The Nghi Son oil refinery and petrochemical complex was licensed in 2008, with four investors namely PetroVietnam, Kuwait Petroleum International, and Japanese companies Idemitsu Kosan and Mitsui Chemicals. With an area of 400 hectares, the refinery produces LPG, Ron 92 and 95 fuels, diesel, fuel oil, jet fuel, polypropylene, para-xylene, benzene, and sulfur.

The investors raised the capital by $2.8 billion in 2013 to make the refinery the biggest oil refinery and petrochemical project ever licensed in the country. It is scheduled to become operational in 2017 and reach its maximum annual capacity of 9.62 million cubic metres of petroleum products by 2018.