MoF requests re-assessment of $250 million petroleum project
MoF requests re-assessment of $250 million petroleum project
The Ministry of Finance (MoF) has just published its official stance on the Ministry of Industry and Trade (MoIT’s) proposal on supplementing the project on building an underground petroleum storage facility for commercial purposes at Dung Quat Economic Zone in Quang Ngai province.
The proposal is important to Vietnam’s crude oil and petroleum products storage system development planning to 2015, with vision towards 2025.
The information was confirmed by an executive in charge at Dung Quat EZ Management Authority on April 11.
The executive said that the MoF had asked the MoIT to review some contents to underline the necessity of adding the project to the above-mentioned planning.
Particularly, the MoIT is required to assess the project’s impacts on the earlier-approved national petroleum depot project at Dung Quat EZ, developed by state-owned national oil and gas group PetroVietnam, and clearly determine its investment scale to avoid overlapping with other PetroVietnam’s projects.
In addition, according to the MoF, it is important to take into account new methods and experiences in storing crude oil and other petroleum products currently applied in other countries, as well as the project’s impacts on ensuring the national energy security target—a growing concern in the context of volatile global oil prices in the past months.
Looking back on the project’s legal groundwork, the MoF’s reply states, “The project record referring to adding the project to the planning has yet to contain the necessary legal base for drawing the project and the proposal; therefore, the developer is requested to supplement a list of relevant legal documents to serve as an evaluation base to consider adding the project to the Vietnam crude oil and petroleum products storage system development planning.”
The MoF document also notes that in the investment proposal on building an underground petroleum storage facility, the developer has yet to make comparison of the advantages and limitations of the plan compared to a floating storage facility or other storage forms.
Regarding the proposed investment capital of about $250 million, the MoF required the developer to clarify the method of calculating the sum, the proposed loaning structure, as well as setting suitable measures on mobilising capital to match specific investment phases to ensure effective project implementation.
Earlier, the Quang Ngai Province People’s Committee requested the Ministry of Industry and Trade and the General Directorate of Energy to add Dung Quat underground petroleum storage project to the list of investment projects to be encouragement under the BOT, BTO or BT format, so that the province will have a right to sign a BOT contract and develop the project as requisitioned.
