Vietnam’s second oil refinery at Nghi Son in central Thanh Hoa province edged closer to full approval last week when the project’s feasibility study went to state-run PetroVietnam for assessment.
The study will be sent for government approval in November. The National Assembly has the final say on the $2.7 billion project and is expected to make its decision early next year.
The study recommends a joint venture company runs the project. One-third of the project’s total capital should be sourced from the Vietnamese side, the rest from the foreign partner, according to the study.
Several commercial foreign banks and foreign partners have shown interest in the project, according to the director of the project’s management board, Ngo Duong Hung. The Japan Bank of International Cooperation (JBIC) said it was willing to loan the project money, especially if the foreign partner in the joint-venture was a Japanese one.
Mitsubishi Corporation, one of the consultants for the feasibility study, has also said it would like to go ahead with PetroVietnam in the project.
The feasibility study clarifies issues missed in the pre-feasibility study that was submitted a year ago and is the result of consultation between foreign organisations such as ABB Lammus Global and Mitsubishi and the project’s management board.
Crude oil used at the refinery will be exploited from inland and offshore fields, to insure optimum quality and quantity for the 7 million tonne facility.
“This is the first time the sour oil from Middle East will be imported to be used with the sweet oil from inland fields like Bach Ho, Su Tu Den, Su Tu Vang. The proposed proposition is half-half,” Hung said.
“We will also convey a study on crude oils from neighbouring countries like Malaysia and Brunei in case the imported Middle Eastern and domestic oil cannot meet the demands of the complex.”
This initiative makes the complex distinct from Vietnam’s only other oil refinery at Dung Quat which is to use domestic crude oil.
The polypropylene plant, the second most important part of the complex after the oil refinery, will have a capacity of 300,000 tonnes per year, double that proposed in the pre-feasibility study.
It is believed that once the plant is completed, together with 150,000 tonne-capacity Dung Quat polypropylene plant, the serious shortage of polypropylene on the domestic market will be overcome to some extent. The complex is scheduled to be finished by the end of 2010 with total invested capital of $2.7 billion.