Thailand’s PTT closes on $22 billion oil refinery deal

Ho Quoc Dung, Chairman of Binh Dinh People’s Committee, revealed that the government in a meeting early this month had accepted the Ministry of Industry and Trade’s proposal to add the PTT Victory project to the national oil and gas development plan.

This means PTT’s detailed feasibility study which was submitted to the Ministry of Industry and Trade and the government last September seems to have proved convincing.

“We are waiting for the official announcement from the government to grant the investment certificate,” said Dung.

He added that a government and Binh Dinh People’s Committee delegation would visit Thailand to discuss the project with the Thai government.

Once licensed, the PTT Victory plant will be the largest foreign direct investment in Vietnam and the fifth oil refinery and petrochemical project to be licensed in Vietnam.

PTT began looking into this investment in 2012. The firm had earlier planned to build a refinery with a daily capacity of 660,000 barrels, with $28 billion in investment costs, but scrapped the idea over profitability issues.

In September, Thailand’s national oil and gas firm completed and submitted a feasibility study to the Vietnamese government. The detailed study included a commercial, technical, financial, social and environmental impact assessment, as well as strategies and partner selection.

According to PTT, the optimum crude processing capacity is 400,000 barrels per day, producing 260,000 barrels per day of refined petroleum products and five million tonnes of petrochemical products annually. The facility is also expected to produce 4 - 5 million tonnes of basic chemicals annually, including ethylene and benzene.

This project will require an estimated capital investment of around $22 billion.

PTT and Saudi Arabian state-owned oil company Saudi Aramco will likely invest 40 per cent of the total investment cost each in the project, while the remaining 20 per cent will be mobilised from a Vietnamese partner.

The involvement of Saudi Aramco will allow the refinery to procure crude oil at competitive prices through the company’s partnership with Saudi Arabia, one of the world’s main oil producers.

Besides operating Dung Quat refinery in Quang Ngai, two other integrated petrochemical and refinery complexes Nghi Son and Vung Ro are also under construction in Vietnam.