Lao petrol firm inks deal on $300-500mn oil pipeline from central Vietnam
Lao petrol firm inks deal on $300-500mn oil pipeline from central Vietnam
A Lao petroleum company will develop a project to build a pipeline system connecting the central provinces of Vietnam and Laos under a contract it signed Wednesday with the local government and a Slovakian energy firm.
The 290km pipe will bring oil products from the Hon La seaport in Vietnam’s Quang Binh Province to Laos' Khammouane Province.
PetroLao closed a consultant contract with Slovakia’s Energy Commodities, tasking the latter with completing a feasibility report on the project, which also consists of a bonded warehouse, during yesterday’s signing ceremony in Dong Hoi, the capital city of Quang Binh.
The Laotian government and several Lao businesses will cover 100 percent of the investment, worth between US$300 million and $500 million, required for the project.
Transporting oil products via a pipeline between Hon La seaport and Khammouane is seen as a convenient route thanks to the short distance between Quang Binh and Laos, the companies said at the event.
The project is expected to help reduce transportation costs of oil products and ensure energy security for Laos, according to newswire VnExpress. It will also boost bilateral trades between the countries, as well as stabilize and develop the Lao energy industry.
The bonded warehouse at Hon La seaport is expected to be capable of storing 300,000 to 500,000 cubic meters of fuel products.
Another 100,000-200,000 cubic meter warehouse will also be set up in Khammouane.
A bonded warehouse is a building in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty.
Construction of the pipeline and warehouse facilities is poised to start in the fourth quarter of 2015, and completion and operation is slated for 2018.
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