Petrovietnam eyes $18.5 bln refinery

The project, to be located in Ba Ria – Vung Tau Province, will be developed in two phases, with 70 percent of funding needed in the first, the state-owned company said in a proposal.

If approved, this will be the third oil refinery in Vietnam.

Vietnam is set to record a shortage of 19.5 million tons of fuel annually from 2030 and 49 million from 2045, Petrovietnam forecast.

Domestic consumption is now at 18 million tons a year and will reach 33 million by 2030, but two existing refineries, Dung Quat and Nghi Son, will only be able to produce at most 13.5 million tons by 2025, it said.

Vietnam’s current fuel reserve is as low as 5-7 days of consumption, which means it must be dependent on imports, it added.

As the country has been spending billions of U.S. dollars annually to import fuel, an additional oil refinery and storage complex is necessary, Petrovietnam said.

Ba Ria – Vung Tau is suggested because the southern region consumes the most fuel in the nation at 45 percent of the total, but there is no refinery there yet.

Petrovietnam will utilize domestic sources as input for the refinery and import the rest from the Middle East, the U.S. or other countries.

In the first phase, the refinery will produce 7-9 million tons of gasoline and diesel a year and 2-3 million tons of petrochemicals.

In the second phase Petrovietnam will reduce its gasoline and diesel production to 3-5 million tons a year and increase petrochemical to 5.5-7.5 million tons.

The complex will be able to hold 1 million tons of crude oil and gasoline a year as national reserve.

Petrovietnam is set to complete all necessary documents to submit to the government in January, while feasibility research and final approval is scheduled for 2023 and 2024.

The project will then be constructed within three years to complete in 2027.