Dung Quat oil refinery to halt operation, but Vietnam won’t lack petrol

The Dung Quat Oil Refinery No 1 will halt its operation for two weeks, starting from March 23, as previously planned to have equipments verified. However, petrol distributors have affirmed that the petrol supply will not be interrupted.

Nguyen Hoai Giang, General Director of Binh Son Petrochemical Refinery Company, said that this is for the first time since the takeover day of the oil refinery in June 2010, the whole refinery halts operation to verify operational equipments to find out the equipments that need to be replaced.

The oil refinery maintenance will be carried out within two months, from July to September. Giang said since it always takes a long time to import equipments for replacement, about 3-5 months, it is necessary to verify the equipments soon in order to discover problems soon, which allows to order equipments for replacement soon.

In November 2010, the Dung Quat Oil Refinery No 1 singed the contracts on selling products to four big consumers, including Petrolimex, Petec, PV Oil and Vinapco. Under the agreements signed among involved parties, Petrolimex will consume two million cubic metres of products from Dung Quat, while PV Oil 1.5 million cubic meter, Petect 1 million, and Vinapco 200,000 cubic meters. As such, the total volume of petroleum products the four companies will purchase is 4.7 million cubic meter of different kinds, including A92 and A95 petrol, diesel, Z1 air petrol and FO fuel oil.

According to Giang, during the time when the oil refinery halts operation, the petroleum market would be short of 400,000 tons of products of different kinds.

“We have reported about the plan to halt operation to the Prime Minister. During the time of interruption, partners will have to take initiative to look for other supply sources,” Giang told VnExpress.

About 60 experts of the contractor complex Technip, the South Korean maintenance contractor SK, the French supplier of technology copyright and 1000 engineers of Binh Son Company will join the verification.

Currently, the oil refinery still has 100,000 tons of products in stocks. In order to ensure the fuel constant supply for the domestic market, the company has sent letters to distributors, suggesting to import 400,000 tons of petroleum products for the domestic consumption during the time the oil refinery halts operation.

Meanwhile, petroleum distributors have affirmed that the operation interruption for two weeks will in no way affect the supply.

Vuong Thai Dung, Deputy General Director of Petrolimex, the biggest consumer of Dung Quat Oil Refinery’s products, has said that the supply will be still profuse. “We have prepared for this (the operation interruption), therefore, the trade will be going as usual,” he said.

Petrolimex now holds 60 percent of the domestic petroleum market with 2100 belonging agents and more than 4000 other small filling stations and small agents. In January and the first half of February, Petrolimex imported more than 1.5 million tons of petroleum products, an increase of 22 percent in comparison with the same period of 2010. Therefore, the corporation has affirmed that the supply is profuse.

A manager of PV Oil said that the products from Dung Quat just account for 30 percent of the sales volume of the company, while the other 70 percent has still been fed with imports. Therefore, the operation interruption of two weeks will in no way affect the market supply. “We will have enough products to provide, even though we are incurring heavy losses,” he said.

Tran Huu Phuc, Director of Vinapco, the distributor of air petrol, said every month, the company buys 10,000 tons of diesel from Dung Quat. However, the consignments of products to be delivered to Vinapco will not be the ones in the operation interruption duration.

“We can control the supplies in any cases,” Phuc said.

However, experts have pointed out that though Dung Quat can satisfy only 30 percent of the domestic demand, the operation interruption of the oil refinery will, more or less, affect the market. The civil war in Libya has pushed the oil price up in the world due to the fear for supply interruption.

The price of finished petrol products in Singapore has been staying firmly high in the last 30 days at 116.63 dollar per barrel. With the import price, enterprise is incurring the loss of 1500 dong per liter of petrol sold and 2100 dong per liter of oil.- VnExpress

Tags: Dung Quat oil refinery