Vietnam Axes $538-MM oil refinery project due to delays

HANOI (Reuters) -- Vietnam has decided to scrap a $538-million oil refinery project in the country's southern region after investors failed to start construction around eight years after they received the licence, a provincial government official said on Friday.

Photo Courtesy of Petrovietnam.
Photo Courtesy of Petrovietnam.

The Mekong Delta-based Can Tho refinery, licensed in 2008 to process 2 MMt of crude oil annually, has now been cancelled, Nguyen Van Hong, director of Can Tho city's Planning and Investment Department, told Reuters.

Initially, the license was handed to a venture between Semtech Limited BVI and a Vietnamese firm, Vien Dong Investment and Trading Co, but Semtech later pulled out, according to a Can Tho municipal authority report.

Razeedland Plaza Sdn Bhd, a unit of Brunei's SGB Refinery Petrochemical Corporation Sdn Bhd, replaced Semtech but still failed to implement the project, the report said.

The Can Tho refinery's cancellation is the second in Vietnam this year, after authorities in the central region scrapped a $20-billion refinery and petrochemicals plant with Thai oil company PTT in July due to delays.

Vietnam, Asia's third-largest holder of crude oil reserves after China and India, has only one refinery, the 130,500-bpd Dung Quat plant that has been running at 107 percent of its capacity.

State oil and gas group PetroVietnam has been building the second oil refinery, the $7.5-billion 200,000-bpd Nghi Son plant which is due to start operation in July 2017, but construction of this has also been facing delays.

Reporting by Ho Binh Minh; Editing by Himani Sarkar

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