Oil and gas giant PetroVietnam will build $18.5bn refinery
Oil and gas giant Petrovietnam is seeking government approval to build a $17-18.5 billion refinery and crude oil storage facility in southern Vietnam amid an expected domestic fuel shortage.
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The project, which will be located in the province of Ba Ria-Vung Tau, will be implemented in two phases, with the first phase requiring 70 percent of the funding, the state-owned company said in the proposal.
If approved, it will be the third refinery in Vietnam.
According to Petrovietnam's forecast, Vietnam will have a fuel shortage of 19.5 million tons per year from 2030, and 49 million tons from 2045.
Domestic consumption is currently 18 million tons per year and will reach 33 million by 2030, but the two existing refineries, Dung Quat and Nghi Son, will be able to produce no more than 13.5 million tons by 2025, the report said.
Vietnam's current fuel supply is only 5-7 days of consumption, which means it must depend on imports, he added.
As the country spends billions of US dollars annually on fuel imports, PetroVietnam said an additional refinery and storage facility is needed.
Baria-Vung Tau is proposed because the southern region consumes the most fuel in the country, 45 percent of the total, but does not yet have a refinery.
Petrovietnam will use domestic sources as refinery feedstock and import the rest from the Middle East, the US or other countries.
At the first stage, the plant will produce 7-9 million tons of gasoline and diesel fuel per year and 2-3 million tons of oil products.
At the second stage, PetroVietnam will reduce the production of gasoline and diesel fuel to 3–5 million tons per year and increase the production of petrochemicals to 5.5–7.5 million tons.
The complex will be able to store 1 million tons of crude oil and gasoline per year as a national reserve.
PetroVietnam is going to prepare all the necessary documents for submission to the government in January, and the feasibility study and final approval are scheduled for 2023 and 2024.
The project will then be built over three years and will be completed in 2027.