Wednesday , February 8 2023

Nghi Son Refinery cuts production due to technical issue


The Nghi Son oil refinery will cut production by 20-25% this month as it fixes a technical issue which could affect supply.

The Ministry of Industry and Trade said the reason is that the refinery in the central province of Thanh Hoa has shut down its residue fluid catalytic cracking system due to fluid leakages.

The production cut will equate to around 125,000 cubic meters.

Nghi Son meets around 40% of Vietnam’s monthly fuel demand of 1.6-1.8 million cubic meters.

A spokesperson for the refinery confirmed the closure and said the issue is being resolved so that the plant could resume normal operation as soon as possible.

The ministry said the plant would resume normal operation by mid-January and increase production to make up for the suspension.

In January last year Nghi Son had cut production by 25% due to a cash crunch, which triggered a nationwide fuel shortage.

To prevent a similar occurrence now, Minister of Industry and Trade Nguyen Hong Dien has instructed state-owned oil firm Petrovietnam to immediately resolve the issue and stabilize production at Nghi Son.

To make up the shortfall, the country’s other refinery, Dung Quat, needs to increase its production to maximum capacity, and other sources need to be tapped, he added.

Suppliers and distributors need to proactively find other import sources, he added.

A distribution company which buys from Nghi Son told VnExpress that January 20 would be the earliest it could resume buying from the refinery.

This means there would be tension in supply from now until Tet, Vietnam’s biggest holiday, which falls on January 23.

Nghi Son, built in 2018, has a capacity of 10 million tons of crude oil a year, double that of Dung Quat.

It is owned by Petrovietnam, Kuwait Petroleum International and Japan’s Idemitsu Kosan and Mitsui Chemicals.

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