PetroVietnam gives gas to oil plans

PetroVietnam, investor of the $6.2 billion Nghi Son refinery in Thanh Hoa province, expects to sign a key construction contract in 2011’s second quarter.

Negotiations for the Engineering, Procurement and Construction (EPC) contract were underway between PetroVietnam and a consortium led by Japanese JGC Corporation, Japanese Chiyoda Corporation, French Technip SA, Korean SK Engineering and GS Engineering.

Under its plan to put the refinery into operation in 2014, PetroVietnam planned to sign this contract by the end of last year. However two sides still hope to receive more favourable conditions from the Vietnamese government.

When signed, this will be the largest EPC contract in Vietnam’s oil and gas sector, because with the estimated investment capital of $6.2 billion, the investors decided to issue only one EPC package contract.

Nghi Son will be the second oil refinery in Vietnam and the first involving foreign partners. It is expected to be put into operation in 2014. PetroVietnam holds a  25.1 per cent stake in the project, Kuwait Petroleum International with 35.1 per cent, Japan’s Idemitsu Kosan with 35.1 per cent and Mitsui Chemicals with 4.7 per cent.

When finished, the project will have a designed capacity of 10 million tonnes of crude oil a year, or 200,000 barrels a day, 1.5 times higher than the capacity of the operational Dung Quat, Vietnam’s first oil refinery.

Japan’s JGC Corporation in October, 2010 was chosen for being a consultant for the expansion of the Dung Quat refinery in central Quang Ngai province, from the current 6.5 million tonnes to 10 million tonnes.

JGC previously involved in a joint venture with French Technip and Spain Tecnicas Reunidas to build Dung Quat refinery where JGC was responsible for Residual Fluid Catalytic Converter, LPG Treater and Naptha Treater areas. – VIR

Tags: Nghi Son refinery, PetroVietnam