$3.2 billion Vung Ro refinery and petrochemical complex revoked

$3.2 billion Vung Ro Refinery and petrochemical complex

The Phu Yen People’s Committee has asked the Management Board of Phu Yen Economic Zone in collaboration with the province’s Department of Planning and Investment to consider the decision to revoke the project invested by Vung Ro Petroleum Company Limited (VRP), the developer of the Vung Ro project.

The Vung Ro project was granted an investment certificate in 2008, with a total investment capital sum of nearly $3.2 billion and annual capacity of eight million tonnes of crude oil. The refinery is going to be constructed on an area of 538 hectares. Of the total, 404ha will be used for the construction of the refinery, and 134ha, excluding the areas of sea encroachment, will be used for the construction of Bai Goc Seaport. Besides, this project is allowed to use 500-1,300ha of sea surface area.

In 2014, VRP held the ground-breaking ceremony for the refinery. The complex was slated to start commercial operations by 2016 and will produce a wide range of products, including gasoline, polypropylene, benzene, toluene, xylene, and diesel. The products will be distributed domestically and exported to foreign markets.

After ten years and 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 rouble, which increased the costs of implementing the project.

Previously, in July 2017, Chairman of the Phu Yen People’s Committee Hoang Van Tra sent a document to the Phu Yen Department of Planning and Investment to urge the implementation of big projects in the province. Accordingly, the project on Vung Ro complex was put under a warning status.

In January 2018, VRP and the UK-based Technostar Management Limited, which set up VRP to implement the refinery project, signed a co-operative agreement with DenimoTech, a Denmark-headquartered firm, aiming to provide turnkey solutions for the petroleum by-product sector and aid the implementation of VRP’s new manufacturing plant in Vietnam.

Specifically, the Danish industrial product manufacturer committed to team up with Vung Ro in the construction of a high-tech state-of-the-art bituminous binders processing plant, utilising green technology from Denmark. However, to date, the construction of project is still immobile.