UK-headquartered Technostar Management, through its subsidiary Vung Ro Petroleum, gained approval from the Vietnamese government to double the scale of its oil refinery in Phu Yen province to 8 million tonnes annually.
“The capacity change of Vung Ro oil refinery is in line with Vietnam’s oil and gas industry development strategy in the context of international integration. This project is not only aimed at satisfying the domestic demand, but also oriented to export petrochemical products,” Prime Minister Nguyen Tan Dung said.
He said the project would have a positive impact on the industrialisation and modernisation of the province and urged Phu Yen Provincial People’s Committee to revise the project’s investment certificate.
Phu Yen Provincial People’s Committee previously estimated the project would contribute around $111 million of tax every year.
In order to support Vung Ro Petroleum, the prime minister also agreed to exempt it from paying export tax and permitted it to distribute the products in the domestic market.
Previously, a senior Vung Ro Petroleum official told VIR that the firm expected to begin construction of this refinery this year as it also concluded negotiations with an unidentified contractor.
If things go according to the plan, this will be the third oil refinery built in Vietnam, following Dung Quat in central Quang Ngai province and Nghi Son in central Thanh Hoa province.
According to Vung Ro Petroleum, when starting commercial operations by 2016, this refinery will produce a wide range of products including gasoline, polypropylene, benzene, toluene, xylene and diesel.
Vung Ro Petroleum was initially given an investment certificate in 2007 with the total registered capital of $1.7 billion. The construction of the project was delayed for years because of the site clearance obstacles. However, most outstanding issues have been addressed and construction is expected to start in a matter of time.
In August 2012, Vung Ro Petroleum reached a technology transfer agreement with Honeywell’s UOP, a leading international supplier and licencor for the petroleum refining and petrochemical production. This agreement will ensure the firm to own the latest petroleum refining technology.
Ninh Kieu (vir.com.vn)