By VU TRONG KHANH
HANOI -- State-run Vietnam Oil and Gas Group, or
PetroVietnam, said Thursday that it is actively making
preparations for construction of the country's second
oil refinery but there are still issues to be resolved before
work can begin.
"We're actively preparing for the project, and once the
preparation is completed, we will start construction," said PetroVietnam CEO
Do Van Hau.
Plans to build the 200,000-bpd Nghi Son refinery in Thanh
Hoa province by investors from Kuwait, Japan and Vietnam have
been delayed several times. PetroVietnam earlier said the refinery could cost $8 billion-$10
"We're still in talks and haven't made a final investment
decision," a spokeswoman for Idemitsu Kosan Co., one of the
partners in the project, said Thursday.
Vietnamese state media cited PetroVietnam Chairman Phung
Dinh Thuc as saying earlier this week that there are still
minor issues that he hopes can be resolved in the fourth
quarter so the project can progress well.
Mr. Thuc didn't clarify what the issues are but said the
foreign investors in the project must take careful steps in
the wake of difficult world economic conditions, online news
provider VnEconomy reported.
PetroVietnam said in July that it expected to sign an
engineering, procurement and construction contract as well as
begin building the refinery in the third quarter, but
that didn't happen.
Mr. Hau said in August that the Vietnamese government would
act as the guarantor for some liabilities of the project but
added that the government wouldn't provide a guarantee for any
of the loans to be taken for the project.
Shunichi Kito, finance director for Idemitsu Kosan, also
said in August that a financing problem that had long hampered
talks with banks had been resolved.
"We have agreed at some level" of underwriting from the
Vietnamese government, Mr. Kito said, but he declined to give
details. Banks had been unwilling to lend to the project without underwriting from
the Vietnamese government.
Idemitsu Kosan and Kuwait Petroleum International each hold
a 35.1% stake in the planned refinery, to be built 180
kilometers south of Hanoi, while PetroVietnam and Mitsui
Chemicals own 25.1% and 4.7%, respectively. KPI is a unit of
state-owned Kuwait Petroleum.
The Nghi Son refinery is being designed to
process Kuwaiti crude, and Kuwait Petroleum is to supply all of
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