Idemitsu Leads Consortium to Construct Vietnam's $9 Billion Refinery

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--A consortium has been awarded the contract to construct the $9 billion Nghi Son Refinery and Petrochemical (NSRP) complex in the Vietnam's Tinh Gia district of Thanh Hoa province, 200 kilometers south of Hanoi. The consortium consists of Idemitsu Kosan (OTC:IDKOY) (Tokyo, Japan) (35.1%); Kuwait Petroleum International (KPI) (35.1%); Mitsui Chemicals (TYO:4183) (Tokyo) (4.7%); and state-owned PetroVietnam (25.1%).

Idemitsu is leading the construction of the refinery, which will have a processing capacity of 200,000 barrels of oil per day and will meet the growing demand for petroleum product in the domestic market. It also will give Vietnam a strategic advantage in the growing market of Southeast Asia.

The mechanical completion date for the project is set for 2016, and commercial production will start in 2017, with a focus on the production of liquefied petroleum gas; gasoline products A92, A95 and A98; jet fuel; and diesel oil. KPI will supply crude oil to the project at a rate of about 10 million barrels annually, which could rise to 20 million barrels.

The partners in NSRP have issued a letter of intent for the front-end engineering design (FEED) to a consortium consisting of JGC Corporation (TYO:1963) (Yokohama, Japan), Chiyoda (OTC:CHYCY) (Yokohama), Technip Group (France, Malaysia) (OTC:TKPPY) (Paris, France), SK Engineering and Construction (Seoul, South Korea) and GS Engineering & Construction (Seoul).

NSRP will soon launch syndication procedures for a co-financing arrangement with international commercial banks, export credit agencies and multi-lateral agencies.

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