Mammoth oil refinery project feasibility scrutinized

Relevant agencies are scrutinizing the feasibility of an oil refinery project costing as much as US$27 billion proposed by a Thai investor, and would only request central authorities to give their blessing after prudent considerations.

Thailand’s PTT Company, which has suggested a US$27-billion oil refinery and petrochemical project in Nhon Hoi Economic Zone in Binh Dinh, is working with the provincial government on the pre-feasibility study report, an official said.

The report will be completed in late March or early April, said Nguyen Ngoc Toan, deputy head of the Nhon Hoi Economic Zone Authority.

He said that an oil refinery with a daily capacity of 660,000 barrels to be developed on 2,000 hectares remains an idea of the Thai investor. Binh Dinh is collecting comments from the Ministry of Industry and Trade and relevant agencies before submitting a comprehensive report to the Prime Minister.

Speaking at a meeting with the investor and Binh Dinh’s leaders on January 10, Minister of Industry and Trade Vu Huy Hoang said the project was of a very large scale, so it had to be screened carefully in terms of supply-demand, financial arrangement and competitiveness.

The country’s current master plan on oil refining does not envision such a huge project, but the trade ministry will suggest the Government to make changes to the master plan if the colossal scheme proves to be viable.

PTT, therefore, has been asked to provide additional information to perfect and increase the evidentiary effect of the pre-feasibility study report.

By 2020, if Nghi Son Oil Refinery and Petrochemical Complex and similar projects in the planning are implemented on schedule, and Dung Quat Oil Refinery in Quang Ngai operates normally, the local output will basically meet the domestic demand.

Therefore, the project in Nhon Hoi if approved should consider exporting its refined oil and selling petrochemical products to the local market.

The investor should identify the long-term crude oil supply, analyze the competitiveness of the project in comparison with other projects in the region and evaluate its impacts on the oil refinery projects in neighboring provinces and on the environment.

Still, the most important issue is financial arrangement. According to the Ministry of Industry and Trade, PTT Company should clarify its commitments on capital contribution and its ability to raise loans from banks and financial institutions.

If the project proves feasible, the ministry would support PTT as the main investor, with participation of Vietnamese investors. However, it is necessary to specify strategic investors and the method for project implementation, especially when there will be many investors.

In addition, the trade ministry makes clear to the Thai investor that Vietnam’s Government will only provide policy supports, not financial supports.

The investor is supplementing information as required by the ministry to complete the pre-feasibility study report for submission to the Government, said Toan of the Nhon Hoi Economic Zone Authority.

If approved, the project would get off the ground in the first quarter of 2016 and start operations in 2019.

  • Source: SGT

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