Thais tie down giant refinery plans

“The project site agreement is considered as an approval in principle for the two energy projects, that will allow the investors to conduct other steps”

Two Thai investors are taking another step closer to developing giant oil refinery and power plants in central Binh Dinh province.

Rayong Purifier Public Company will build an oil refinery with total annual capacity at three million tonnes and STFE Company will build a 700 megawatt thermal power plant in Nhon Hoi Economic Zone’s non-tariff area.

The two companies also signed a memorandum of understanding with Binh Dinh People’s Committee for developing the projects, which were initially proposed last July.

“The project site agreement is considered as an approval in principle for the two energy projects, that will allow the investors to conduct other steps,” said Man Ngoc Ly, director of Nhon Hoi Economic Zone Management Authority.

According to the memorandum of understanding, Rayong Purifier Public Company will pump $120 million into the oil refinery plant in the first stage, which is planned to break ground in July, 2011. The construction of this project will be implemented within two years.

The Thai company announced the new refinery’s capacity could be raised to eight million tonnes per year in the second stage of the project.

Rayong Purifier Public Company, founded in 1995, is now operating an oil refinery at Map Ta Put Industrial Estate in Thailand’s Rayong province. The refinery has a production capacity of 17,000 barrels a day, or 80 million litres per month. This company has also invested in petrochemical factory in southern Can Tho city.

Once licenced, Rayong Purifier Public Company’s project will be the sixth oil refinery factory in Vietnam. The other projects are located in Thanh Hoa, Quang Ngai, Phu Yen, Can Tho and Ba Ria-Vung Tau. But, only the refinery in Quang Ngai province is operating with annual refining capacity of 6.5 million tonnes.

Russia’s ALT Group is also seeking opportunity to build an oil refinery in Nhon Hoi Economic Zone. However, the company has not yet conducted a feasibility study for the project.

STFE Company plans to invest $850 million into a power plant, covering 60 hectares. It will import coal from Indonesia and Australia for the plant.

However, Ly said the investor had to wait for the governmental approval because the project was not in the nation’s power development master plan.

He said those two projects could be granted investment certificates because of the rising energy demand in Vietnam.

Vietnam has been encouraging foreign investors to build oil refineries and power plants, to reduce its reliance on petroleum imports and ease severe electricity shortages. – VIR