Saturday May 10, 07:29 AM
Vietnam starts construction on 6 billion dollar oil-refinery
NGHI SON, Vietnam (AFP) - Energy-hungry Vietnam started building its second oil refinery on Saturday, a 6.2 billion dollar complex, in a bid to feed the nation's booming economy, the State Oil company announced.
Vietnam Oil and Gas Corporation (PetroVietnam), the oil monopoly in the communist nation, set up a joint-venture with its counterparts from Japan and Kuwait to build Nghi Son refinery in the north of the country.
Vietnamese Prime Minister Nguyen Tan Dung hailed the project at the ground-breaking ceremony, saying it was the country's most important and biggest power scheme, attracting capital investment of 6.2 billion dollars.
Petrovietnam said the refinery, with a targeted capacity of up to 10 million tonnes a year, is located in Thanh Hoa province, about 200 kilometres (125 miles) south of the capital Hanoi.
Petrovietnam will hold a 25.1 percent stake, Japan's Idemitsu Kosan Co (IKC) and Kuwait Petroleum International KPI) will each hold a 35.1 percent share, and Mitsui Chemicals Inc (Stuttgart: 858586 - news) (MCI), also of Japan, will have the remaining 4.7 percent.
The Nghi Son refinery, to be operational by 2013, will turn Kuwaiti oil into petrol, liquefied petroleum gas, diesel, kerosene and jet fuel for Vietnam, which has offshore oil reserves but currently imports petroleum products.
Dung said last month the facility would create about 10,000 jobs and the state media said around 1,000 local families will be relocated from more than 500 hectares of Gia Tinh district.
Dung Quat, the country's first refinery costing around 2.5 billion dollars, is now being built after lengthy delays in central Vietnam and is expected to produce 6.5 million tonnes a year from 2009 -- equivalent to a third of the country's needs.
"By 2013, this project combined with Dung Quat refinery would ensure 65 percent of Vietnam oil and gas demand. It will contribute to ensure the nation's energy security," the Prime Minister said.
PetroVietnam is now preparing for its third refinery project in Long Son district of southern Ba Ria-Vung Tau province.
Vietnam's economy grew at 8.5 percent a year in 2007, and its energy needs for industry, households and transport are rising annually at about twice that rate.
Last year, Vietnam spent eight billion dollars to import 12.55 million tonnes of refined oil.
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