Chuck Kuhn's Asia in Photos: Contracts inked to build nation’s 2nd oil refinery

Tuesday, April 8, 2008

Contracts inked to build nation’s 2nd oil refinery

A contract to set up a joint venture that will build and operate Vietnam's second oil refinery in Thanh Hoa Province was signed in HCM City yesterday in the presence of Prime Minister Nguyen Tan Dung.

The country's second-largest oil refinery will be built in Thanh Hoa Province by a joint venture between the Viet Nam National Oil and Gas Corp. Kuwait Petroleum International and Japanese Idemitsu Kosan Corp.The partners in the new company include the State-owned Viet Nam Oil and Gas Corp or PetroVietnam (PVN), Kuwait Petroleum International (KPI) and Japanese companies Idemitsu Kosan Corp (IKC) and Mitsui Chemicals Inc (MCI).
The first stage of the Nghi Son Refinery & Petrochemical Complex project, to come up in the Nghi Son Economic Zone, around 200km south of Hanoi, will cost some US$6bil.
When it goes online in 2013, the plant will have a capacity of processing 10mil tonnes of crude oil per year or 200,000 barrels per day.
The capacity will then be doubled in the second stage of the project.
According to a press release from the four partners, the project's debt-to-equity ratio is targeted at 70:30 per cent.
The Japan Bank for International Co-operation (JBIC) will provide loans of about 70% of the project's capital.
Initial paid-in capital amounts to $200mil.
KPI and IKC each hold 35.1% of the joint venture's capital, PVN 25.1% and MCI 4.7%.
"All the joint venture partners wish to earn benefits for the investors, contribute to the robust development of Vietnam and enhance the existing friendly relationship among Vietnam, Kuwait and Japan," the press release said.
PVN wished to implement the development strategy of the oil down-stream sector, including refining and petrochemicals; to contribute to secure energy security for the nation; to pave the way for the development of petrochemical industries; and to contribute to the realisation of socio-economic objectives for southern Thanh Hoa and northern Nghe An provinces.
KPI's participation in the Nghi Son project was approved by the Kuwait Supreme Petroleum Council, and the presence of the Minister of Oil of Ku-wait, Mohammad Al-Aulaim, at yesterday's signing ceremony, was evidence of Kuwait's support to the project and to Vietnam.
Kuwait has committed to securing long-term 100% crude oil supply for the project, with about 10mil tonnes per year for the current stage and 20mil tonnes per year in the expansion stage of the project.
Speaking at the ceremony, Prime Minister Nguyen Tan Dung said the signing of the JV agreement and charter of Nghi Son Refinery & Petrochemical Complex project was the result of two years' determination by PetroVietnam and Ku-waiti and Japanese partners.
In addition to 8 to 10mil tonnes of oil and petrochemical products per year, the project will also create tens of thousands of jobs in the construction and operational stages of the project.
Dung said the project would also help pave the way for the development of Vietnam's oil and gas industry between 2015 and 2025 while contributing to the country's economic development.
"The Vietnamese Government greatly appreciated support from the governments of Kuwait and Japan, which symbolise the friendship between Vietnam, Japan and Ku-wait," said Dung.
At the reception yesterday for the Kuwait Minister of Oil, Mohammad Al-Aulaim, Prime Minister Dung pledged to provide further favourable conditions for Kuwaiti investors to expand their businesses in Vietnam.
Dung said the Nghi Son project was not simply a business achievement both sides had reached, but a good model that could be applied to more bilateral business opportunities.
KPI President Hussain Esmail said that through the Nghi Son project, Ku-wait would provide long-term and stable supplies of energy and expertise in the development, construction and operation of highly complex projects, along with expertise in domestic and international marketing operations.
"The Nghi Son project provides KPC/KPI a platform for further expansion and consolidation of our activities in Vietnam," said Hussain.
According to PetroVietnam, the joint venture had expected to receive the investment license for the project in June 2008, and the master design for the plant would be completed by October 2009.

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They say "

“I can’t say what made me fall in love with Vietnam - that a woman’s voice can drug you; that everything is so intense. The colors, the taste, even the rain. Nothing like the filthy rain in London. They say whatever you’re looking for, you will find here. They say you come to Vietnam and you understand a lot in a few minutes, but the rest has got to be lived. The smell: that’s the first thing that hits you, promising everything in exchange for your soul. And the heat. Your shirt is straightaway a rag. You can hardly remember your name, or what you came to escape from. But at night, there’s a breeze. The river is beautiful. You could be forgiven for thinking there was no war; that the gunshots were fireworks; that only pleasure matters. A pipe of opium, or the touch of a girl who might tell you she loves you. And then, something happens, as you knew it would. And nothing can ever be the same again.”
― Graham Greene, The Quiet American

Tips on Travel to Vietnam

It's always warm in Southeast Asia apart from high mountains, so leave the heavy clothing at home. Cotton and breathable fabrics are always better than synthetics -- although cotton does wrinkle a lot when traveling! December through April is roughly the dry season in that region, although it can still rain a little. December is a good time to go in terms of temperature -- cooler than in the humid summertime. Either way, wearing more clothing (shirt sleeves and long pants) is always more respectful towards the Asian culture, especially when visiting temples and rural areas.