Vietnam - Japan announces investment delay in Nghi Son refinery project

VietNamNet Bridge - Idemitsu Kosan Co., the third largest oil refinery company in Japan yesterday, November 6, announced to postpone investing in the Nghi Son refinery in Vietnam.

As being originally intended by the parties, the Nghi Son refinery will start operation in 2014. After making the announcement, Idemitsu Kosan said that the project cannot be put into operation until 2016.

Mr. Shunichi Kito, Idemitsu Kosan’s Financial Director, said the company hopes to soon make a decision on investment in the refinery in Vietnam, but he declined to say specifically when.

In August 2012, Idemitsu Kosan announced that they were in final negotiations on investment decisions on Nghi Son refinery, worth $5.8 billion. At that time Shunichi Kito said the project had received a guarantee from the Government of Vietnam. This step had solved the difficulty for loans, because bankers did not want to lend unless there is a government guarantee on.

Last month, representatives of the Vietnam National Oil and Gas Group (PetroVietnam) told the media that they were completing the final stage of preparation for the second refinery project in Vietnam. However, there were some issues to be resolved before embarking on the job, the Dow Jones Newswires reported.

Being revealed four years ago, Nghi Son oil refinery will have a capacity of 200,000 barrels a day, but so far the project is still on paper. Before the statement made yesterday by the Japanese investor, the oil refinery project in Thanh Hoa province had experienced several times of delay.

Besides Japan and Vietnam, the project also has the participation of an investor from Kuwait. Japan’s Idemitsu Kosan and the Kuwait Petroleum International own 35.1 percent of stake each in the plant.

PetroVietnam and Mitsui Chemicals Company hold the remaining 25.1 percent and 4.7 percent. Under the plan, the Nghi Son refinery will process crude oil transferred from Kuwait.

Source: VNE

Translated by Le Ha

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