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Vietnam to hire consultant for $1.8-billion refinery expansion

By Toan Dao   June 11, 2016 | 07:50 am PT
Vietnam’s Binh Son Refining and Petrochemical (BSR) is in the process of selecting a consultant to arrange funding for an expansion project at its Dung Quat refinery, newspaper under the Ministry of Industry and Trade reported June 10.

BSR is wholly owned by state-owned PetroVietnam and is the operator of the 6.5 million ton/year refinery in the central province of Quang Ngai.

Part of Dung Quat refinery. Photo by VnExpress/Tri Tin

Part of Dung Quat refinery. Photo by VnExpress/Tri Tin

No potential name was disclosed.

Talks with potential foreign investors to sell stakes to secure funding for the expansion project have failed to reach any conclusion in recent years. Russia's Gazprom Neft in January decided to put on hold discussions for acquiring stakes in the refinery. It said it will consider buying the stakes in other opportunities in the future.

BSR said it is working on a plan to privatize the refinery under the direction of PetroVietnam and the central government. The central government expects the sale of BSR shares to be completed by the end of 2017.

Former Prime Minister Nguyen Tan Dung in December 2014 approved PetroVietnam's $1.8-billion plan to expand the Dung Quat refinery capacity to 8.5 million tons/year by 2022 from the current 6.5 million tons/year. The government has said Vietnam will finance the expansion itself if it could not reach a deal with foreign investors.

BSR in late August 2015 awarded U.K.-based Amec Forster Wheeler the Front End Engineering Design (FEED) the contract for the expansion project at the refinery.     

Construction is expected to be completed in the third quarter of 2021 and the expansion project is targeted to start commercial operations by 2022, BSR said.

Currently Dung Quat meets more than 30 percent of Vietnam's demand for oil products with the remainder coming from imports.

Related news:

> Vietcombank lends $90 million to Dung Quat oil refinery operator

> Vietnam’s sole oil refinery imports crude oil first time in nine months

> Vietnam’s sole oil refinery asks to self-regulate import duties

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