Vietnam plans to build six or seven refining and petrochemical complexes to bring the country's total oil processing capacity to as much as 60 million mt/year (1.2 million b/d) by 2025, the Ministry of Industry and Trade indicated in a national five-year plan released over the weekend.
That would be a six-fold increase of the refining capacity that is currently on the cards for the country's first refinery at Dung Quat by around the end of 2015. The total investment needed to reach the 45 million-60 million mt/year target will be around Dong 652 trillion ($32 billion) according to the ministry's development plan for 2020-2025.
Existing plans for the 6.5 million mt/year refinery at Dung Quat call for expanding the capacity to 9.5 million-10 million mt/year by early 2016, at a cost of $1.2 billion. The plant would then be able to meet 40-50% of the country's petroleum demand.
Additionally, Vietnam is planning to build three more refining complexes, namely at Nghi Son, Long Son and Nam Van Phong, each with a capacity of 10 million mt/year. Included as part of the overall plan to raise capacity is the Vung Ro facility -- a 100% foreign investment project -- with a 4 million mt/year processing capability.
State-owned PetroVietnam plans to start building the country's second refinery at Nghi Son, in Vietnam's central region, in the the third quarter this year, the company chairman Dinh La Thang said in May.
Meanwhile, the Long Son refinery proposal in the south has seen no real progress since being licensed in July 2008. That same year Vietnam's biggest oil importer, Petrolimex, was licensed to build the Nam Van Phong refinery and petrochemical complex. Petrolimex is currently conducting a feasibility study on the project and expects to finish it this year.
The Vung Ro refinery project -- a joint venture between UK-based Technostar and Russia's Telloil -- is seeking government approval to raise investment costs to $2.5 billion and double capacity to 8 million mt/year.
Further, according to the five-year plan, the Nghi Son and Long Son plants will be expanded to 20 million mt/year over 2020-2025.
Also in this period, the country will consider building or expanding 1-2 more refineries to ensure "national energy security," according to the report.
The report also calls for the completion of ethanol plants in the northern province of Phu Tho, the central province of Quang Ngai and the southern province of Binh Phuoc of 100,000 mt/year capacity each.
The Phu Tho and Quang Ngai will be operational before the end of the year, while the Binh Phuoc refinery will be online in the second quarter next year, Platts reported earlier.
Vietnam also plans to establish a crude oil reserve of 2.2 million mt by 2025, with underground storage tanks to be built at the Dung Quat, Nghi Son and Long Son refineries. It will also prioritize the building of five main oil product pipelines connecting its main oil refining and petrochemical complexes to various regions around the country.
State-owned oil importers and distributors like Petrolimex, PetroVietnam Oil, Petec will be given first chance to build big storage tanks for oil products across the country, the plan said.
The detailed plan presented by the Ministry of Industry and Trade took effect May 17.
