A range of deals were announced last week for the construction of Vietnam’s second oil refinery and petrochemical complex, located in central Thanh Hoa province.
The Vietnamese government officially gave guarantees to push forward the long delayed construction of Nghi Son complex on January 15. The most important pact - the Government Guarantee and Undertaking Agreement (GGU)— was signed between the Ministry of Industry and Trade and Nghi Son Refinery and Petrochemical Complex Joint Venture Company (NSRP), the complex developer. In addition, a fuel product offtake agreement was signed by the complex developer and state-run PetroVietnam.
Going along with those, NSRP’s letter of award (LOA) for the engineering-procurement-construction contract was given to the group of contractors. A currency board arrangement and service agreement of fronting insurer were also signed.
At the event, Kuwait Petroleum International Company (KPI) was named as long-term crude oil provider for the complex.
PetroVietnam, the domestic partner in the joint venture would secure the complex’s refined oil products, while the petrochemical products would be bought by Japan’s Idemitsu Kosan.
Deputy Prime Minister Hoang Trung Hai said the Vietnamese government would continue creating favourable conditions to support this project so that it could be kept on schedule and become operational in the third quarter of 2016.
NSRP was established in 2008 between PetroVietnam with a 25.1 per cent stake, Kuwait Petroleum International (35.1 per cent) and Japan’s Idemitsu Kosan (35.1 per cent) and Mitsui Chemicals (4.7 per cent).
With the total updated investment capital of $9 billion, once completed the complex will have an annual capacity of 10 million tonnes of crude oil, or 200,000 barrels a day. It will produce liquefied petroleum gas (LPG), gasoline products A92, A95 and A98, jet fuel and diesel oil and is expected to meet 40 per cent of the domestic fuel demand.