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Friday,  Nov 24,2017,03:29 (GMT+7)

PVN’s loss-making ethanol projects show signs of revival

Lan Nhi
Friday,  Sep 8,2017,15:16 (GMT+7)
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PVN’s loss-making ethanol projects show signs of revival

Lan Nhi

A gas station in HCMC sells E5 bio-gasoline. PVN’s loss-making ethanol projects will be able to return to life, helped by the Government’s decision to withdraw A92 petrol from the market to boost still-dismal sales of E5 bio-fuel - PHOTO: THANH HOA

HANOI – Vietnam Oil and Gas Group’s (PVN) loss-making ethanol projects will be able to return to life, helped by the Government’s decision to withdraw A92 petrol from the market to boost still-poor sales of E5 bio-gasoline.

From next year on, only E5, which is a mixture of A92 gasoline and 5% ethanol, and A95 gasoline will be available on the market.

PVN general director Nguyen Vu Truong Son said the withdrawal of A92 from the market had paved the way for PVN to restart its debt-laden ethanol projects.

PVN has reviewed its loss-making projects, including the polyester fiber and ethanol facilities which have been put on hold for years. Son said some partners of PVN’s had shown interest in acquiring stakes at several projects so that they could resume production from early next year.

Three investors – Tin Thanh Industrial Electricity and Steam Co Ltd, Tung Lam Co Ltd and Sundries Investment and Trading JSC (Tocontap) – have expressed interest in the Dung Quat ethanol plant of PetroVietnam Central Bio-fuels JSC (BSR-BF).

BSR-BF has signed a contract with a consulting company to evaluate the project and prepare a divestment plan as well as select investors in September and finalize a production resumption plan before divestment.

For Binh Phuoc ethanol project, a team comprising representatives of PVN and PetroVietnam Oil Corporation (PVOil) has worked with project investor Orient Bio-Fuels Co Ltd (OBF) and its shareholders Thailand’s Toyo Engineering Corporation and Licogi 16 Company (LCG) to discuss plans to revive the project.

PVOil has worked with OBF and Tung Lam Co Ltd to find solutions to production cost cuts and productivity improvement in the project. Among the ethanol projects in the nation, just two projects of Tung Lam Co Ltd have been performing well, so PVN will ask the company for advice.

At a meeting on August 24, 2017, Toyo and Licogi 16 said they would complete necessary procedures to inject more capital into the project.

PVOil and shareholders will have to secure about VND91 billion (US$4 million) to put the project back into operation next year and work with suppliers to ensure sufficient input material.

Two investors – Thai Son Investment JSC and Mepcom Offshore and Marine Pte Ltd – are eyeing the Phu Tho ethanol project developed by PetroVietnam Bio-ethanol Company (PVB). Mepcom Offshore and Marine Pte Ltd has proposed acquiring shares of PVB’s shareholders and develop the project in the build-own-operate (BOO) format.

As for the Dinh Vu polyester fiber plant, Vietnam Textile and Garment Group (Vinatex) has promised to purchase all the plant’s output in 2018. PVN will work with domestic and foreign partners to finalize investment and restructuring options for the project by the end of this year.

According to the ministry, there will be no other choice but to dissolve the Dung Quat shipbuilding project.

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