$4.5bn petro project remains out in the cold

One of Vietnam’s biggest petrochemical and oil refinery projects is struggling to find a place to call home.

Hoang Dinh Phi, vice head of Van Phong Economic Zone Authority, said it would need around VND15 trillion ($769 million) between 2010-2015 to make room for Petrolimex’s $4.5 billion petrochemical and oil refinery complex.

The Khanh Hoa province project has enjoyed no preferential support from the state budget for its construction. “The complex’s resettlement areas will be built this year. We will need some VND500 billion ($25.6 million) for 2010 and the same sum for 2011 for building such areas,” Phi said.

“People with land reclaimed for the complex are ready to be relocated. But, we are really worried about how to find such a big sum of money. I think we will ask the government for part of the sum, while mobilising more from other sources,” he said.

He said the zone’s authority planned to ask the province’s people’s committee to seek Ministry of Finance permission to allow the province to issue bonds to attract capital for the project’s infrastructure.

“It is likely that we will have to think about calling for investors to build infrastructure for the complex, then their taxes will be deducted during their project’s operations at the zone,” Phi said.

In late December, 2008 the government approved the complex’s construction and Deputy Prime Minister Hoang Trung Hai appointed Petrolimex, the country’s biggest petroleum trader, to outline the investment project and make the feasibility report.

“The project will be licenced by the zone’s authority. At present, all relevant ministries and agencies have totally agreed on the implementation of this project. We expect to licence the project at the end of this year,” Phi said.

The complex, located in Ninh Hoa district’s Ninh Phuoc commune, is expected to refine 10 million tonnes of oil per year. It will cover 600 hectares, located on land and sea. Petrolimex is considering establishing a joint venture with a Chinese company to build the complex.

It was expected that project’s construction would begin next year and be completed by 2016. Once completed, the complex would churn out liquefied petroleum gas, petrol, gasoline, diesel oil, benzene, polypropylene and sulfur, the zone’s authority said.

Phi said the complex was expected to bring in VND14 trillion ($718 million) in turnover per year. At present, Vietnam has seven petrochemical and oil refinery projects with total capacity of 60-70 million tonnes of oil per year, most of which are yet to come online.

VIR

Tags: Vietnam petrol, Vietnam petrol project