PetroVietnam Power to build oil refinery complex for $18.5 billion
PetroVietnam Power, a unit of state-owned Vietnam Oil and Gas Group, has said it will build an oil refinery and petrochemical complex within the country. The total investment for the complex is expected to be up to $18.5 billion, according to local news reports.
This will be the third refinery in the country, should the complex come to fruition, and located in the southern province of Ba Ria-Vung Tau.
In the first phase, the petrochemical and refinery plant will have a capacity of processing 12-13 million tonnes of crude oil per year, along with 0.66 million tonnes of condensate, LPG and ethane. The output of the plant will reach 7-9 million tonnes of petroleum and 2-3 million tonnes of petrochemicals each year.
In the second phase, the plant will receive additional investment to increase its output by 3-5 million tonnes of petroleum and 5.5-7.5 million tonnes of petrochemicals per year.
The construction period will be divided into two phases -the investment for the first and second phase is expected to be up to $13.5 billion and $5 billion, respectively. There will also be a facility built for storing petroleum products.
Crude oil and other resources needed for the refinery will be sourced domestically, but any surplus needs will be imported from the Middle East and the U.S., according to the company. The timing of when the construction will take place has not been divulged.
At present, Vietnam has two operating refineries — the Nghi Son Refinery in the northern province of Thanh Hoa, that is operated by Japanese oil producer Idemitsu Kosan, and the Dung Quat Refinery in the central province of Quang Ngai, operated by PetroVietnam. These two refineries enable the country to meet more than 70% of its demand for petroleum products, but there are no refineries in the south.
Ho Chi Minh City, Vietnam’s largest city, accounts for about 45% of the total domestic demand for petroleum and petrochemical products. Vietnam consumes around 18 million tonnes per year of petrochemicals.
Due to downstream expansions, current domestic capacity will only meet about 50% of the demand in 2025 and 40% in 2030.
The company plans to finalize its proposals for submission to the Government in January next year. The firm will make a feasibility study report from June to December 2023 and expects to receive the project’s investment approval in the first quarter of 2024. After that, it will select engineering procurement and construction contractors from January 2024 to December 2027.