It is unclear whether the Vung Ro refinery project in the central province of Phu Yen will be implemented this year, even though both the authorities of Phu Yen province and the leaders of Vung Ro Petroleum Ltd. said they were determined to start the project in 2016.
Vung Ro refinery received its investment certificate in 2008. It has an investment capital of $4 billion and a capacity of 8 million tonnes of crude oil per year. It includes the construction of Bai Goc Port to serve the project as well as for the handling of general cargo and containers. The area of the project is 538 hectares, of which 404 hectares is reserved for the plant and 134 hectares for the port. It is also going to use 500-1,300 hectares of water surface. Phu Yen province expects that the refinery, after starting operation, is going to submit VND8 trillion ($360 million) to the province’s budget in 2020.
After ten years and even a ceremony to start construction, the project has been lying idle. One of the reasons identified by experts is difficult site clearance. Another reason is the weakening Russian ruble, which increases the cost of implementing the project. Technostar Management Limited, which set up Vung Ro Petroleum to implement the refinery project, is headquartered in the UK, but owned by a group of Russian investors.
Last August, Phu Yen authorities started construction of a road to serve the project. In March 2016, when Phu Yen voters asked about the status of the project, the authorities said that it will start operation in the first quarter of 2019.
At the moment, there is only one operating refinery in Vietnam, the Dung Quat Refinery in Quang Ngai province, with a capacity of 6.5 million tonnes of crude oil per year. Additionally, Nghi Son Refinery is going to start operation next year, with a capacity of 8.4 million tonnes per year.
Late last month, Binh Dinh province proposed the government to strike out the Nhon Hoi refinery project from the national oil and gas development plan. The province also declared that it no longer wanted to attract any oil and gas projects to Nhon Hoi Economic Zone.