JV partners hold groundbreaking ceremony for Vietnam’s second refinery

Kuwait Petroleum International (KPI) and its joint venture partners held a groundbreaking ceremony on October 23 for Vietnam’s second oil refinery and petrochemical complex in northern Vietnam.
The groundbreaking ceremony was held in the Nghi Son Economic Zone, about 180 kilometers south of Hanoi, in the presence of Kuwait’s Deputy Prime Minister and Minister of Oil Mustafa Al-Shimali and Vietnam’s Prime Minister Nguyen Tan Dung, as well as more than 1,300 senior officials in the energy sector from Kuwait, Japan and Vietnam. Investment in the refinery is estimated at USD9 billion.
Covering an area of 400 hectares in northern Thanh Hoa Province, the Nghi Son Refinery and Petrochemical Complex will be the first with foreign investors’ participation. Kuwait aims to expand its retail business in Vietnam, where demand for oil products is rapidly increasing for 90 million people and 33 million motorbikes.
KPI and Japan’s Idemitsu Kosan Co. equally own 35.1% of the joint venture, while PetroVietnam own 25.1% and Mitsui Chemicals Inc. 4.7%.
KPI’s parent company Kuwait Petroleum Corporation (KPC) will supply all the feedstock for the facility, which will also include petrochemical units, energy facilities, a pipeline and storage systems, along with an information management system. As Kuwait’s third refinery abroad after Europoort, Rotterdam, in the Netherlands, and Milazzo on the northern coast of Sicily, in Italy, which it co-owns with ENI, the joint venture reflects Kuwait’s desire to invest in the growing energy markets and maximize the value-added benefits of the nation’s petroleum resources and implement KPI’s long-term strategic directions designed to expand its refining operations and sales in emerging markets.
Construction will be completed in the fourth quarter of 2016, and commercial operation is expected to start in mid-2017 with a refining capacity of 200,000 barrels per day or 10 million tons per year. It will meet 40% of Vietnam’s fuel demand. Capacity could be doubled in the second phase.