JGC in line for key refinery deal

An oil and gas sector source told VIR that the consortium, including Japanese Chiyoda Corporation, French Technip SA, Korean SK Engineering and GS Engineering, was in pole position in the bidding list.

Others in the mix are a consortium consisting of Samsung, Hyundai, Technicas Reunidas, led by Saipem and another consortium made up by Dealim, Technimont and Petrofac.

The source added that the investor, the Nghi Son Company, was implementing contract negotiations and related conditions with the leading consortium.

This will be the largest engineering, procurement and construction (EPC) contract in Vietnam’s oil and gas sector and the investors decided to issue one EPC package contract.

The contract, according to PetroVietnam general director Phung Dinh Thuc, would be signed at the end of February 2011, after the investor finishes its technical appraisal report of the proposed contractors.

A week ago Japanese news wire Nikkei said the JGC consortium had won exclusive negotiating rights for the contract without saying where it got the information.

However, JGC Vietnam general director Hayashi Terumitsu denied it had won the contract.

“The client [Nghi Son Company] is evaluating the proposal from our team and Saipem and its partners,” Terumitsu said.

JGC in October, 2010 was chosen as consultant for the expansion of Vietnam’s first refinery Dung Quat in Quang Ngai province.

The government last June allowed PetroVietnam to raise Dung Quat’s annual capacity from 6.5 million to 10 million tonnes.

JGC was previously involved in a joint venture with France’s Technip and Spain’s Tecnicas Reunidas to build the Dung Quat refinery where JGC was responsible for Residual Fluid Catalytic Converter, LPG Treater and Naptha Treater areas.

Nghi Son is the second refinery in Vietnam and also the first refinery with foreign partners’ involvement, expected to be put into operation in 2014. PetroVietnam has a 25.1 per cent stake in the project, with Kuwait Petroleum International (35.1 per cent), Japan’s Idemitsu Kosan (35.1 per cent) and Mitsui Chemicals (4.7 per cent).

The project when finished will have a designed capacity of 10 million tonnes of crude oil a year, or 200,000 barrels a day, 1.5 times higher than the capacity of the existing Dung Quat oil refinery.

Once operational in 2014, the refinery will annually churn out 2.3 million tonnes of petrol, 3.7 million tonnes of diesel and a significant amount of liquefied gas for domestic use.