BSR seeks $600 million for Dung Quat refinery expansion

Levelling works for the Dung Quat Oil Refinery Expansion and Upgrade Project are being sped up. Photo courtesy of BSR

According to an announcement on August 10, BSR formally issued the request for proposal to banks and international financial institutions to select a lending consortium for the Dung Quat expansion, including a Mandated Lead Arranger (MLA). The step follows extensive preparation with financial advisers to structure funding that matches the project’s scale, schedule and technical characteristics.

BSR is seeking approximately $600 million in debt financing, equal to about 40 per cent of the project’s $1.49 billion total investment. The balance will be covered by equity and other sources. This structure allows BSR to phase capital deployment, avoid unnecessary early borrowing and better control interest costs during construction.

The request for proposal does not prescribe a single funding model. Banks may propose facilities insured by the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group; export-credit-agency-backed loans linked to the engineering, procurement, and construction (EPC) package; or offshore commercial loans. The flexibility allows BSR to compare interest rates, tenors, insurance costs, disbursement conditions and risk-sharing arrangements.

BSR expects to select the financing consortium and MLA in the fourth quarter of 2026 and aims to have debt ready for disbursement from the third quarter of 2027. Until then, the company will use equity to maintain project progress. This approach helps balance cash flow, minimise unnecessary financing costs and preserve flexibility during EPC implementation.

The Dung Quat expansion will raise capacity from 148,000 to 171,000 barrels per day, broaden crude-processing flexibility and enable production of Euro V standard fuels. It is therefore more than a capacity project; it is a comprehensive upgrade in product quality, feedstock adaptability and operating efficiency.

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