Nghi Son refinery and petrochemical complex in a rush to complete construction

Nghi Son refinery and petrochemical complex in Nghi Son Economic Zone in the central province of Thanh Hoa

According to a report published by NSRP, as of October 24, the preparations for the pilot operation, which was expected to start in either late November or December this year, were 37 per cent finished only. At present, NSRP has surmounted technical problems, however, it is forecast that the complex will not start pilot operations on time.

Regarding the engineering, procurement and construction (EPC) contract of the project, as of late October 2017, 97.78 per cent has been completed. Previously, on April 30, 2017, NSRP approved the mechanical completion certificate (MCC) of the project.

On August 30, the Vietnam Environment Administration under the Ministry of Natural Resources and Environment asked NSRP to build a detention reservoir that is large enough to store a wastewater volume that would be generated by the project in three days. Besides, NSRP has to install an automatic monitoring system via cameras which can connect and transfer data to the relevant authorities.

According to Dinh Van Ngoc, deputy general director of NSRP, the factory is in a rush to satisfy all the requirements set by the State Council for Pre-Acceptance Test of Construction Works before the plant starts operations.

Regarding the environment, the plant conducted a survey in collaboration with the consultancy firm on building the detention reservoir and the online monitoring system. The construction and installation of these stages are expected to be completed in December 2018.

Ngoc added that the Ministry of Natural Resources and Environment permitted the plant to take the processing workshop into pilot operation.

Output challenge

To date, NSRP imported 540,000 tonnes of crude oil for its pilot programme. According to the plan, the total crude oil volume used in processing will reach 6.4 million tonnes by 2018, with the total output volume of 5.3 million tonnes, including 1.7 million tonnes of liquefied petroleum gas (LPG), 1.49 million tonnes of petroleum, and 2.7 million tonnes of oil.

The finished products will be sold to factories, distributors, and petroleum trading enterprises, among others, via long-term contracts signed in 2013.

With the designed annual capacity of 10 million tonnes of crude oil for processing, NSRP faces challenges in selling its products.

Notably, Nguyen Quang Dung, deputy general director of Vietnam National Petroleum Group (Petrolimex), the country’s biggest state-owned petroleum distributor, said that Petrolimex is waiting for NSRP’s products to diversify its supply sources. However, NSRP and Petrolimex need to have a clear agreement on the selling price as well as the terms of both the short-term and the long-term contracts.

Besides, NSRP currently can receive ships of 30,000 tonnes only, thus it needs over 300 trips per year to serve for the purchase of materials and the sale of NSRP’s products. This will create pressure on NSRP’s transport system as the refinery has a one-way fairway only.

Furthermore, the fees for towing ships at NSRP are very high, 10 times higher than those at Dung Quat refinery, thus, it is also a concern for petroleum traders because, in the end, the expenses will be apparent in the selling price of the products.

RELATED CONTENTS:
	$9 billion Nghi Son refinery and petrochemical complex about to start operating
	Nghi Son Refinery may not be eligible for preferential selling price
	Nghi Son refinery might prove costly endeavour to investor and state
	Doosan delivers hi-tech pressure equipment to refinery
	Honeywell to train next generation of refinery technicians in Vietnam
	EPC contract signed for Nghi Son oil refinery