The contract was signed between the Nghi Son Petrochemical Co., Ltd. and a group of design, equipment supply and construction contractors, after nearly five years of preparation.

The Nghi Son oil refinery is a national key project, covering an area of 400 hectares in the Nghi Son economic zone (Tinh Gia, Thanh Hoa). The refining capacity is expected to reach 200,000 barrels per day (equivalent to 10 million tons a year,) with crude oil imported from Kuwait as raw material. The plant's products include liquefied petroleum gas, gasoline RON 92 and RON 95, jet fuel, diesel, paraxylene ...

The total investment of this project is nearly $9 billion, in which loans from domestic and foreign banks are expected to be nearly $5 billion. The rest is the capital of the investors, including the Vietnam Oil and Gas Group (PVN) with 25.1%, the Kuwait Petroleum International (KPI/KPE) 35.1%, Idemitsu Kosan Co. (Japan, IKC) 35.1%, and Mitsui Chemicals (Japan, MCI) 4.7%.

The group of contractors is led by JGC (Japan) and other members include, Chiyoda (Japan), GS E&C (Korea), SK E&C (Korea), Technip France (France), and Technip Geoproduction (Malaysia).

It is expected that the construction of the Nghi Son oil refinery will be completed in the fourth quarter of 2016 and it will be put into commercial operation in 2017, meeting about 40 percent of the national demand for petroleum.

Speaking at the signing ceremony, Prime Minister Nguyen Tan Dung stressed: "The construction and operation of the project will be a significant step towards self-refining products and ensuring the energy supply. In addition, this project has the largest volume of foreign direct investment to date in Vietnam, so it will help to attract more FDI, especially from Japan and Kuwait."

Once the Nghi Son project is put into operation with the Dung Quat oil refinery, they will meet 70% of domestic petroleum demand, playing an important role in ensuring national energy security, at the same time, marking the development of the petrochemical industry in Vietnam.

By S. Tung - VietNamNet Bridge - January 27, 2013