By MARI IWATA
TOKYO -- Japanese refiner Idemitsu Kosan Co. and its
partners have made a final investment decision on Vietnam's
second oil refinery and secured $5 billion in
project finance, Idemitsu said
The $9 billion Nghi Son complex 180 kilometers south of
Hanoi will have a refining capacity of 200,000 bpd. It
is slated to process Kuwaiti crude supplied exclusively by
Kuwait Petroleum International.
Construction will begin in July and
commercial operations are expected to start in the second
quarter of 2017.
Idemitsu and Kuwait Petroleum each owns a 35.1% stake in the
project. State-owned Vietnam Oil
& Gas Group, known as Petrovietnam, and Mitsui Chemicals
own 25.1% and 4.7%, respectively.
Petrovietnam will buy all oil products from Nghi Son at
Asian market prices, as its output is primarily intended to
meet the needs of Vietnam's domestic market. The joint-venture
contract also allows it to export any excess production to
avoid reducing the refinery's operating rate.
Nghi Son will produce 700,000 tpy of paraxylene, all of
which Idemitsu and Mitsui Chemicals will take.
The project has been delayed several
times -- the final investment decision was originally scheduled
for the summer of 2010 -- as the partners struggled to obtain
bank financing without underwriting by the Vietnamese
government. Talks progressed rapidly, however, after the
government agreed in August to take official and unofficial
measures to minimize financial risks.
Dow Jones Newswires