Prime Minister Nguyen Tan Dung has given the green light to a US$27-billion oil refinery project in the coastal province of Binh Dinh.—VNS File Photo

HA NOI (Biz Hub)— Prime Minister Nguyen Tan Dung has given the green light to a US$27-billion oil refinery project in the coastal province of Binh Dinh.

This was publicly revealed yesterday by Ho Quoc Dung, Deputy Chairman of the Binh Dinh provincial People's Committee, during an online forum organised by the Government portal.

The development is set to receive investment from the Petroleum Authority of Thailand (PTT).

The provincial official confirmed that Binh Dinh had signed a memorandum of understanding (MoU) with their Thai partners in April 2013 agreeing to the project, which will be the largest of its kind in the country. The positive outcome was reached after three years of negotiations. The refinery will be built in the Nhon Hoi Economic Zone (EZ).

Dung reassured the public that the mammoth project was feasible, saying the local administration had already carefully appraised the Thai group's financial capacity.

He said PTT was a large financial group with total assets of more than US$150 billion, ranking among the world's top 100 financial giants. The company records annual revenues of over $80 billion and earns nearly $3.5 billion in profit.

The Thai group has decided to invest in Nhon Hoi EZ as the zone has good infrastructure, a low-cost labour force and the lowest land rental in the region. It also has a deep-water seaport located along the national north-south trade route, which also connects Viet Nam with overseas markets.

Head of the Ministry of Planning and Investment's (MPI) Economic Zones Management Department, Vu Dai Thang, said that while the project was very large given the current difficulties facing the economy, the MPI had regularly evaluated the viability of the project.

Construction of the refinery is expected to begin in 2016 before becoming operational by 2020. The refinery has been designed to turn out 30 million tonnes of products annually.

Crude oil will be imported from the Middle East, Africa and South America to feed the plant, which is to produce more than 20 types of products for export.

According to the MoU, PTT will contribute as much as 60 percent of the project's total investment and the remaining sum will be mobilised from both domestic and international investors.

Man Ngoc Ly, head of provincial Industrial Zone Management said Deputy PM Hoang Trung Hai had signed a document assigning Binh Dinh People's Committee with setting up the project along with the PTT. The province reported to the Ministry of Industry and Trade, who reported to the Prime Minister, the leader responsible for granting approval. In addition, the project also needed appraisal by the Ministry of Natural Resources and Environment.

Although the Vietnam Oil and Gas Group claims that the Nhon Hoi project may cause an imbalance in the supply and demand of oil, the Ministry of Industry and Trade as well as provincial authorities and several experts have supported the implementation. — VNS