Kuwait Petroleum Corporation Chief Executive Officer
Farouk Al-Zanki and PetroVietnam President and CEO Do Van Hau on Friday
reaffirmed their concerted efforts to resolve outstanding issues of the planned
refining and petrochemical joint venture.
"Mr. Do pledged his full
support to secure Vietnamese government's guarantee for foreign exchanges for
lenders of the project," Al-Zanki told Kuwait News Agency (KUNA) after the
talks.
"The Kuwaiti government is
committed to this project, which is also in line with KPC's strategy to expand
downstream business," he said, adding that KPC will supply 100 percent
crude oil for the vital joint venture with Vietnam and Japan.
The state-of-the-art refinery
will have an annual oil processing capacity of 10 million tons, or 200,000
barrels per day (bpd), with a view to going online in 2015.
"The contract for
Engineering, Procurement and Construction (EPC) will be awarded once
outstanding issues, including finance, are resolved," Al-Zanki said.
The Nghi Son Refinery
Petrochemical Complex, the largest and most important refining project in energy-hungry
Vietnam, will be located in the northern province of Thanh Hoa, some 180
kilometers south of Hanoi.
The facility will also include
a petrochemical complex, energy facilities, a pipeline and storage systems,
along with an informatics system. It will primarily churn out products such as
LPG, gasoline, diesel and jet fuel for the domestic market, together with
paraxylene, benzene and polypropylene for neighbouring countries.
KPC's international unit Kuwait
Petroleum International (KPI) established the joint venture in April 2008 with
PetroVietnam, Japan's Idemitsu Kosan Co. and Mitsui Chemicals Inc. KPI and
Idemitsu each own a 35.1 percent stake in the joint project, with PetroVietnam
and Mitsui Chemicals Inc. putting up 25.1 percent and 4.7 percent,
respectively.
Although Vietnam is Southeast
Asia's third-largest producer of crude oil, its limited refining capacity means
that it still relies on imported oil products. As Vietnam's largest refinery,
it is expected to contribute more than 30 percent of the nation's demand for
petroleum products. Last year, the International Finance Corporation (IFC), a
member of US-based World Bank Group, has approved funding for construction.
Upon the approval, the IFC said
that the project is expected to benefit from the continuous growth projected in
the demand for refined products in Vietnam, which has averaged some six percent
annually over the last decade and is expected to continue in the longer run.
The project is also expected to
provide over 33,000 jobs at peak during the construction period, according to
the IFC.
Al-Zanki and Do also agreed on
further cooperation between PetroVietnam and KPC's subsidiary Kuwait Foreign
Petroleum Exploration Company (KUFPEC) in oil exploration projects in Vietnam,
according to KPC's top official.
The meeting was also attended
by KPC International Marketing Managing Director Nasser Al-Mudhaf, KPI
President Hussain Esmaiel, KPI Deputy Managing Director Mohammed Rashed Jasem,
Business Development General Manager Ghanim Al-Otaibi, Deputy General Director
of Nghi Son refinery Naser Ben Butain, KPI Hanoi Chief Representative Turki
Al-Ajmi and other officials.
Al-Zanki arrived in Hanoi late
Thursday after concluding his successful visit to Beijing, where he met heads
of major Chinese oil companies.
KUNA
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