Japanese investor delay won't impact on oil refinery

HA NOI (VNS)— Construction of Viet Nam's largest oil refinery complex will start as planned, despite a decision-making delay from Japanese investor Idemitsu.

An official of PetroVietnam, the complex manager and also an investor, moved quickly to assuage fears after it emerged that a final investment decision on the complex had yet to be taken by Idemitsu, which holds a 35 per cent stake in the project.

Do Van Hau, PetroVietnam general director, said last Thursday that Idemitsu would still invest in the project but had delayed its investment so that action could not affect the start of construction on the complex, according to the VnExpress, an online newspaper.

Hau said investors of the project would sign a contract by the end of the year as planned, marking an important step towards the commencement of construction.

On Tuesday, Reuters quoted Shunichi Kito, Idemitsu's executive officer in charge of accounting, as saying that Idemitsu Kosan Co, Japanese investor of the Nghi Son refinery, was delaying a final investment decision on the Nghi Son refinery.

The company hoped to make a final investment decision soon on the Nghi Son refinery, without being more specific, he said.

Idemitsu said in August it was in the last stages of talks on the investment decision to build the refinery.

While last month, PetroVietnam's chairman Phung Dinh Thuc said construction of the complex was expect to start this quarter. 

Preparation work for the construction is virtually completed and only a few details remain to be discussed among investors including PetroVietnam (holding 25.1 per cent of the refinery's total shares), Kuwait Petroleum International (35.1 per cent), Japan's Idemitsu Kosan Co (35.1 per cent) and Mitsui Chemicals (4.7 per cent).

Total capital investment for the refinery project is worth nearly US$8 billion. It will be built in the central province of Thanh Hoa, 215km south of Ha Noi and will initially have a production capacity of 10 million tonnes per year.

Dung Quat refinery, built in the country's central coast to process 130,500 barrels of crude oil per day, is now Viet Nam's sole operating facility. Together with Dung Quat refinery, Nghi Son plant is expected to meet roughly 50 per cent of Viet Nam's gasoline demands.

Source: VNS