Prime Minister Nguyen Tan Dung has confirmed his agreement to guarantee
the nation’s role in the $8 billion Nghi Son oil refinery. It is the second refinery
of Vietnam and the first one which has foreign investors involved.
According to an announcement just
released by the Government Office, Prime Minister Dung has agreed with the
draft commitment proposed by the Ministry of Industry and Trade (MoIT) in
September 2012 to give guarantees and issue a supportive letter to the giant
project.
The Vietnamese government has
also assigned the MoIT to combine with the State Bank to guideline Nghi Son
Joint Venture to implement this guarantee.
The prime minister also agreed in
principle to permit state-run PetroVietnam – the domestic partner of the joint
venture - to be the sole buyer of the project’s products.
These confirmations from the
prime minister are expected to push forward the implementation of the delayed
project.
At a meeting also held last week
in Hanoi, PetroVietnam’s CEO Do Van Hau confirmed that the Engineering
Procurement and Construction (EPC) contract of this refinery will be signed in
December this year, after long time of negotiations. Hau said the
project’sfeasibility study was finished and related parties were finishing
preparation works to hand over the EPC contract, which is a milestone toward
the start of construction.
One year earlier, according to
PetroVietnam, the total value of the EPC contract to build Nghi Son refinery
would come up to more than $5 billion, the highest valued EPC contract so far
in Vietnam.
International contractors
involved in this EPC are also the ones that have involved in building the first
oil refinery in Vietnam – Dung Quat refinery in central Quang Ngai province.
The contractors include Technip
from France and Japan’s JGC. At the end of October this year, the overseas
press reported that Idemitsu Kosan, the third largest oil refinery company in
Japan and also one partner in Nghi Son refinery in Vietnam, had announced it
would postpone investing in this project, due to the restructuring of its
investment funding process.
However, Hau said the decision to
adjust funding plans of the Japanese partner would slow down the project a bit,
but did not affect the progress of the whole project.
“The Japanese firm has not
stopped or withdrawn investment in the project. Only the negotiation process
has slowed down a little and it does not affect anything,” Hau said.
Nghi Son refinery is developed by
a joint venture between PetroVietnam with a 25.1 per cent stake, Kuwait
Petroleum International with 35.1 per cent, Japan’s Idemitsu Kosan at 35.1 per
cent and Mitsui Chemicals at 4.7 per cent.
The project will have a capacity
of 10 million tonnes of crude oil per year, or 200,000 barrels a day, 1.5 times
greater than Dung Quat oil refinery’s current capacity.
Bich Ngoc | vir.com.vn
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