Vietnam is about to finalize the negotiations for second oil refinery
Vietnam is about to finalize the negotiations for second oil refinery
The Nghi Son oil refinery project, the second oil refinery in Vietnam, is now under the final stage of negotiation. It will have the total investment capital of 8-10 billion dollars and the designed capacity of 200,000 barrels per day.
The third biggest Japanese oil refinery group--Idemitsu Kosan, has said that it is now in the final stage of negotiations about the construction of the Nghi Son oil refinery in Vietnam. The government of Vietnam has decided to guarantee for a part of the project.
Reuters has quoted Shunichi Kito, Finance Director of Idemitsu, as saying at a press conference held in Tokyo on August 7 that the capital for the Nghi Son oil refinery project is nearly ready four years after the project implementation was announced.
Dow Jones Newswire has quoted its sources as saying that Nghi Son has the investment capital of 8-10 billion dollars and the capacity of 200,000 barrels per day.
Do Van Hau, General Director of the Vietnam Oil and Gas Group (Petro Vietnam), said on Dow Jones Newswire that the government of Vietnam has agreed to act as the guarantee for some debt liabilities of the project, but it will not guarantee for any loans of the project.
With the move by the government of Vietnam, the Nghi Son project has made a new step forwards. This is really the important information for international investors as well as for the oil and gas market, since Vietnam now only has one oil refinery.
The statement by Do Van Hau was made right after Mr Kito spoke at the press conference in Tokyo that the financial problem, the main obstacle to the negotiations on the construction of the Nghi Son oil refinery, has been settled.
Mr Kito simply said the involved parties have reached consensus at a certain level about the government of Vietnam’s guarantee, but he declined to give more details.
In the past, commercial banks refused to provide loans to the project without the guarantee by the government. “We are in the final stage of negotiations. There are no big problems with the Vietnamese side. The negotiations are not in a state of deadlock,” Mr Kito said, adding that Idemitsu would make the final investment decision as soon as it can.
The decision on making investment in Nghi Son has been delayed two times at least.
Each of Idemitsu Kosan and Kuwait Petroleum International (KPI) would hold 35.1 percent of stakes in Nghi Son project. Meanwhile, PetroVietnam and Mitsui Chemicals hold 25.1 percent and 4.7 percent of stakes, respectively.
KPI is a subsidiary of the Kuwait Petroleum Corporation, while Mitsui is a Japanese company.
The foreign sources have reported that Japanese Minister of Economics, Trade and Industry Yukio Edano is paying a working visit to Vietnam. However, the minister said the partners in Nghi Son project and the government of Vietnam have reached a consensus at a high level and they do not need the special assistance from the minister.
In July 2012, PetroVietnam stated that the Nghi Son refinery construction may kick off in the third quarter of the year. It has been designed to refine the oil imports from Kuwait, while Kuwait Petroleum would provide all the input materials to the refinery.
Meanwhile, Japanese oil groups are looking for the opportunities to expand overseas markets, since the domestic demand has decreased due to the old population and the tendency of shifting to use environment friendly fuel.
Another Japanese company, JX Nippon Oil and Energy is also considering cooperating with PetroVietnam in the project on expanding the Dung Quat oil refinery.
In related news, Thoi bao Kinh te Vietnam has quoted Nguyen Hoai Giang, General Director of BSR, which is managing and running the Dung Quat oil refinery, as saying that the refinery is running smoothly as usual.
Giang denied the information reported by some foreign newspapers that troubles are occurring at a workshop of the refinery, thus forcing the refinery to stop operation.
vietnamnet
