Vietnam’s $10b refinery moves ahead
Kuwaiti and Japanese investors in Vietnam’s second refinery operation got backing from the Vietnamese government to go ahead with the $10 billion project. The government has agreed to act as a guarantor for some liabilities for the project.
The move is generally important for international investors who have been cautious about joining state-run companies in projects in Vietnam due to their high debt burden. In case of the refinery project, banks so far had been unwilling to lend without underwriting from the Vietnamese government.
Both investors in the refinery, Kuwait Petroleum International and Idemitsu Kosan, Japan’s third-biggest oil refiner, have reached consensus at a certain level about the Vietnam government’s guarantee, according to statements at a press conference held in Tokyo on August 7.
Do Van Hau, General Director of the Vietnam Oil and Gas Group (Petrovietnam), said that the government of Vietnam has agreed to partly act as a guarantor, but it will not guarantee for any loans of the project.
Kuwait Petroleum International and Idemitsu Kosan Co each have a 35.1 per cent stake in the project, while Petrovietnam has a 25.1 per cent stake and Mitsui Chemicals Inc holds the remaining 4.7 per cent. For Kuwait, the investment is one of the larger oil refinery projects it is pursuing in Asia, apart from China. The refinery, named Nghi Son, will process Kuwaiti crude supplied by Kuwait Petroleum.
The refinery is the second of its kind in Vietnam after the Dung Quat refinery in Central Vietnam. It is planned to be located about 200 kilometers south of Hanoi in the Nghi Son Economic Zone. Site-clearing for the project began in 2008 after the joint-venture agreement between the investors had been signed. Construction should commence in the third quarter of 2012. The start of refinery operations is targeted for 2014 with a planned capacity of 200,000 barrels per day, slightly more than in Dung Quat.
[caption id="attachment_4132" align="alignleft" width="283"] Construction works in the Nghi Son Economic Zone south of Hanoi where the new refinery will be built[/caption] Kuwaiti and Japanese investors in Vietnam's second refinery operation got backing from the Vietnamese government to go ahead with the $10 billion project. The government has agreed to act as a guarantor for some liabilities for the project. The move is generally important for international investors who have been cautious about joining state-run companies in projects in Vietnam due to their high debt burden. In case of the refinery project, banks so far had been unwilling to lend...
Kuwaiti and Japanese investors in Vietnam’s second refinery operation got backing from the Vietnamese government to go ahead with the $10 billion project. The government has agreed to act as a guarantor for some liabilities for the project.
The move is generally important for international investors who have been cautious about joining state-run companies in projects in Vietnam due to their high debt burden. In case of the refinery project, banks so far had been unwilling to lend without underwriting from the Vietnamese government.
Both investors in the refinery, Kuwait Petroleum International and Idemitsu Kosan, Japan’s third-biggest oil refiner, have reached consensus at a certain level about the Vietnam government’s guarantee, according to statements at a press conference held in Tokyo on August 7.
Do Van Hau, General Director of the Vietnam Oil and Gas Group (Petrovietnam), said that the government of Vietnam has agreed to partly act as a guarantor, but it will not guarantee for any loans of the project.
Kuwait Petroleum International and Idemitsu Kosan Co each have a 35.1 per cent stake in the project, while Petrovietnam has a 25.1 per cent stake and Mitsui Chemicals Inc holds the remaining 4.7 per cent. For Kuwait, the investment is one of the larger oil refinery projects it is pursuing in Asia, apart from China. The refinery, named Nghi Son, will process Kuwaiti crude supplied by Kuwait Petroleum.
The refinery is the second of its kind in Vietnam after the Dung Quat refinery in Central Vietnam. It is planned to be located about 200 kilometers south of Hanoi in the Nghi Son Economic Zone. Site-clearing for the project began in 2008 after the joint-venture agreement between the investors had been signed. Construction should commence in the third quarter of 2012. The start of refinery operations is targeted for 2014 with a planned capacity of 200,000 barrels per day, slightly more than in Dung Quat.
