The operator of the Dung Quat Refinery, Vietnam’s sole oil refinery, is in talks with a leading Russian oil producer over a plan to increase the facility’s production capacity, its chairman announced Friday.
Binh Son Refinery and Petrochemical (BSR) and Gazprom Neft, Russia’s fourth largest oil producer, are discussing various ways to expand the Dung Quat Refinery, BSR chairman Nguyen Hoai Giang told VnExpress newspaper.
“It is estimated that it will cost US$1.5 billion to $3 billion to increase the refinery’s capacity to 9 to 10 million tons a year,” Giang said.
The $3 billion facility, located in the central province of Quang Ngai, currently produces 140,000 barrels of oil products a day, or 6.5 million tons a year.
Giang said the Russian oil giant has proposed several plans based on the estimates.
Gazprom Neft plans to invest in the refinery, but has yet to determine how much stake it would hold at the facility, the Vietnamese chairman said.
“The talks are still ongoing and BSR is also conducting feasibility study on a $2 billion expansion plan,” he added.
Once it produces 10 million tons of oil products per year, Dung Quat will account for 50 percent of Vietnam’s fuel supply.
Gazprom Neft is a subsidiary of Russian natural gas exporter Gazprom, which owns about 96 percent of its shares.
BSR reported VND150.41 trillion ($7.08 billion) in revenues in 2013.