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PetroVietnam seeks to invest US$19 billion in refinery in Vung Tau

By Le Hoang

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HCMC – PetroVietnam has proposed investing US$19 billion in a refinery and petrochemical complex, and a national oil and fuel reserve, in Ba Ria – Vung Tau.

The complex will be developed at Long Son Petroleum Industrial Zone in the southern province of Ba Ria – Vung Tau to make maximum use of the crude oil, gas, and natural-gas condensate in the country.

The complex will comprise two parts – the refinery and petrochemical project and the national reserve of crude oil and petroleum products.

In the first phase, the refinery and petrochemical complex will have a capacity of processing 12-13 million tons of crude oil per year, along with 0.66 million tons of condensate, LPG, and ethane per year.

Annual output at the complex will reach 7-9 million tons of petroleum and 2-3 million tons of petrochemicals.

In the second phase, the complex will receive additional investments to increase its output by 3-5 million tons of petroleum and 5.5-7.5 million tons of petrochemicals.

For the national reserve of crude oil and petroleum products, it will have the capacity of storing one million tons of crude oil and 500,000 cubic meters of petroleum products each year.

The file for the investment will be finalized and submitted to the Government in January 2023. PetroVietnam plans to undertake a feasibility study from June to December 2023 and expects to receive approval for the investment in the first quarter of 2024.

Vietnam’s production capacity of petroleum products has been far lower than its consumption demand.

The domestic consumption demand for petroleum products was 18 million tons in 2020, and will reach some 25 million tons in 2025, even up to 33 million tons in 2030.

Meanwhile, the maximum production capacity of domestic firms is around 12.2 million tons and will increase to 13.5 million tons after the expansion of the Dung Quat Oil Refinery.

Currently, the domestic supply of petroleum can meet some 70% of the consumption demand, though at the current levels it will meet only 40% of demand in 2030.

Notably, domestic petroleum supply can only meet the consumption demand for nearly 10 days. Just in the first half of this year, Vietnam spent more than US$5 billion on importing petroleum of all kinds, up more than 128 percent over the same period last year.

For petrochemical products, the domestic consumption demand was 9.2 million tons in 2020 and will reach 11.9 million tons in 2025. Meanwhile, the Dung Quat refinery has a maximum capacity of processing 5.8 million tons of petroleum and 150,000 tons of PP each year.

The political conflicts in some countries in the world and escalating prices have negatively affected the supply of petroleum products in Vietnam.

Therefore, the oil refinery and national petroleum reserve with high-end technology will help to satisfy the consumption demand of petroleum products and seeks to bring many benefits to the country.

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