Work begins on Dung Quat refinery

Deputy PM Nguyen Tan Dung (third from the left) presses a button to kick off construction of the Dung Quat oil refinery

Deputy Prime Minister Nguyen Tan Dung broke ground yesterday on the country’s first oil refinery in the central coastal province of Quang Ngai, Covering 338 ha of land and 471 ha of water in Quang Ngai Province’s Binh Son District, the refinery is set to begin operations in 2009. The refinery is expected to process 6.5 million tonnes of crude oil per year at 145,000 barrels of crude oil per day.

Total investment in the refinery has increased from the US$1.3 billion originally approved by the NA to $2.5 billion.

"This is a key national project that requires big investment. When complete, the refinery will play an important role in further developing several economic sectors," said Dung.

An Engineering-Procurement-Construction (EPC) contract worth $1.56 billion for the refinery project was signed in May between the Viet Nam Oil and Gas Corp. (PetroVietnam), which will manage the project, and a consortium comprising the French company Technip, the Malaysian company Technip Geoproduction, JGC of Japan, and Tecnicas Reunidas of Spain. It was followed by another EPC contract worth $425 million for supporting facilities.

Under these EPC contracts the Technip consortium will develop the complete refinery complex and hand it over to PetroVietnam in February 2009 after an eight-month trial run.

The refinery will turn out products including Mogas 90 and 92 gasoline, liquefied petroleum gas (LPG), kerosene, diesel oil, fuel oil and propylene. However, it will still only be able to satisfy 33 per cent of the country’s fuel demand, according to Truong Van Tuyen, PetroVietnam deputy general director and head of the project’s management.

Deputy PM Dung urged PetroVietnam to ensure that construction stayed on schedule without sacrificing quality.

Managing director of the Technip consortium Gerard de la Rosa said: "Dung Quat Refinery will meet international regulations on environmental protection. It will help to further develop Viet Nam’s economy during a time of acute economic competition."

The French ambassador to Viet Nam, Jean-Francois Blarel, added that Dung Quat Refinery would also help promote relations between Viet Nam and France.

(Source: VNS)