Vietnam’s total oil refining capacity will nearly quadruple by 2023 as two new refineries go on stream, market data provider Fitch Solutions reports.
The Dung Quat refinery in the central province of Quang Ngai operated by the state-owned PetroVietnam’s subsidiary Binh Son Refinery Limited (BSR) remains the sole facility now, with a crude oil processing capacity of 148,000 barrels per day (b/d).
Dung Quat will soon be joined by Nghi Son refinery in the central Thanh Hoa Province. Nghi Son is currently testing at full capacity and is scheduled to start commercial operations this month.
The $9 billion Nghi Son project is owned by the Nghi Son Refinery and Petrochemical LLC (NSRP), a joint venture between PetroVietnam, Kuwait Petroleum, Japan’s Idemitsu Kosan and Mitsui Chemical. It will have a designed capacity of 200,000 b/d of crude oil.
Meanwhile, the long-delayed construction of the Long Son refining and petrochemical complex in the southern province of Ba Ria-Vung Tau resumed in February this year, putting it on track to go on stream by the first half of 2023.
Licensed in 2008 and initially slated to begin operations in 2014, Long Son hit a roadblock due to site clearance issues and disagreements over the development strategy between the project partners.
This caused Qatar Petroleum to withdraw from the project in 2015. Thailand’s Siam Cement Group (SCG) increased its stake to 71 percent after it bought the 25 percent stake owned by Qatar Petroleum, while PetroVietnam held the remaining 29 percent.
In May this year SCG agreed to acquire PetroVietnam’s 29 percent. The refinery is expected to cost $5-6 billion. Once completed it will be able to process 200,000 b/d of crude oil and produce 1.6 million tons of olefins annually.
“The two new refineries would increase competition in the domestic fuel market, which could require refiners to upgrade, cut costs and move up the value chain to win market share,” Fitch Solutions said in a report released Monday.
This also spells an end to Dung Quat’s status as the country’s sole refiner, which it has enjoyed since 2010.
