At the beginning of May 2008 groundwork began on what has been described as one of Vietnam's "largest and most important projects".
The Nghi Son Petrochemical Refinery Complex is set to be built in the Nghi Son Economic Zone, in Thanh Hoa Province, Vietnam.
"Major construction work will start in April 2010 with the complex becoming operational by the end of 2013."
The investment cost for the complex which includes a refinery producing up to 10mtpa of crude along with petrochemical capacity has been put at $6.2bn.
It is anticipated that the major construction work will start in April 2010 with the complex becoming operational by the end of 2013.
Project owners and financing
The Nghi Son Petrochemical Refinery Complex is a joint venture between state-owned Viet Nam National Oil and Gas Group (PetroVietnam), Kuwait Petroleum International (KPI), and the Japanese companies Idemitsu Kosan Corp (IKC) and Mitsui Chemicals Inc (MCI).
The partners hold stakes of 25.1%, 35.1%. 35.1% and 4.7% respectively. The joint venture was established during April 2008.
The Japan Bank for International Co-operation (JBIC) is providing a loan for 70% of the projects initial capital. Current paid in capital is put at $200m.
Feasibility study
At the start of 2008, US-based ABB Lummus Global was awarded a contract to prepare a detailed feasibility study of the Nghi Son Petrochemical Refinery Complex.
"Once operational, the two refineries will allow Vietnam to meet 50% of domestic demand for oil products."
A pre-feasibility study laid the ground work for a refinery with a capacity of 7mpta based on a mix of Vietnamese and Middle East crude. The wide-ranging product slate includes high octane unleaded gasoline, fuel oil and bitumen, along with the petrochemical products polypropylene and polyethylene terephthalate (PET) and associated feedstock.
ABB said that the emphasis of the detailed feasibility study would to be to establish an optimum refinery configuration to meet existing Southeast Asia product needs as well as demand for downstream petrochemical processing units. The company added that "advanced modelling techniques such as linear programming and cash flow calculations will be used to optimise the refinery configuration."
Front end engineering and design
In July 2008 UK-based Foster Wheeler Energy Limited announced that it had been awarded the front end engineering and design (FEED) contract for the planned Nghi Son Refinery & Petrochemical Complex. The FEED work is expected to be concluded during the fourth quarter of 2009. The value of the contract was not disclosed.
Background
Vietnam's first oil refinery is nearing completion and is due to become operational during 2009. The latest plans to develop more refining capacity are important to Vietnam as it will allow the country to secure a national energy strategy and reduce its dependence on imports of petroleum-based products.
It is anticipated that once operational, the two refineries would allow Vietnam to meet 50% of domestic demand for oil products. In addition, the Nghi Son project would contribute to the development of petrochemical and supporting services industries creating many jobs.
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