Viet Nam’s first oil refinery to be expanded for $1.26b

Tuesday, May 09, 2023 14:40

Dung Quat Oil Refinery in central Quang Ngai Province. — VNA/VNS Photo Huy Hung

Dung Quat oil refinery in the central province of Quang Ngai will be expanded to raise its capacity to 171,000 barrels per day, up from 148,000, with a total investment of US$1.26 billion.

Under a decision by Deputy Prime Minister Tran Hong Ha, the operator of the refinery - Binh Son Refining and Petrochemical Joint Stock Company (BSR) - will provide $503 million from its equity and the remaining from loans.

The company, a subsidiary of state-owned PetroVietnam, will set up and put into operation additional technology workshops for the processing of crude oil with higher sulfur content in accordance with the “Euro 5 standard”.

The 10.6ha refinery will be expanded by 41ha, and is scheduled to be finished in the first quarter of 2028.

The expansion was approved in 2014 but was postponed by problems related to the design, appraisal, approval process and capital mobilisation.

PetroVietnam and the company had sought permission to adjust the scale, required technology and progress of the expansion.

The capacity target was adjusted down to 171,000 barrels a day from 192,000, and investment was lowered by $540 million to $1.26 billion.

Construction of the country's first refinery located in Dung Quat Economic Zone started in 2005 and it started producing refined oil products for sale in 2010.

It produces 6.5 million tonnes of crude oil products each year, meeting around 35 per cent of Viet Nam’s total demand.

Viet Nam is currently home to two operational oil refineries. In addition to Dung Quat, the Nghi Son Refinery and Petrochemical LLC located in the northern province of Thanh Hoa is the country’s latest and largest refinery.

The $9 billion refinery is co-owned by state-run PetroVietnam, Kuwait Petroleum Europe B.V. (KPE) and Japan’s Mitsui Chemical and Idemitsu Kosan Co. — VNS

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