Third refinery to step up

Ngoc Linh | | Aug 27, 2012 07:52 am

Vung Ro Petroleum is ready to start hammering out Vietnam’s third oil refinery by the year’s end.

Vung Ro Petroleum and Honeywell’s UOP inked the deal to develop Vietnam’s third refinery

>> Vung Ro Petroleum powers on

The investor, Vung Ro Petroleum Ltd., last week reached managing licensor and technology transfer agreement with Honeywell’s UOP, a leading international licensor for the refining and petrochemical production, for the design and engineering of the refinery in central Phu Yen province.

The signing ceremony was witnessed by US’s commercial counselor in Vietnam Sarah Kemp and leaders of Phu Yen Provincial People’s Committee.

“This is a very important step to implement the project. UOP is a well-known licensor for refining and petrochemical technology in the world, which will provide us not only the technology but also solutions to build and operate the refinery,” said Korolev Kirill, general director of Vung Ro Petroleum Ltd.

Korolev said an engineering, procurement and construction contractor (EPC contractor) could be selected in the upcoming months. Last year, the investor and local authorities also completed siteclearance that had lasted for four years, a barrier coupled with the global financial crisis.

The investor plans to break ground by the year’s end and Korolev said all the needed preparation for the project’s construction had almost been completed, adding that the agreement with UOP LLC would ensure Vung Ro Petroleum Ltd.owns the latest refining technology.

When on streams by 2016, this refinery will produce a wide range of products including LPG, gasoline, gasoline, jet fuel, diesel, fuel oil, polypropylene, benzene, toluene andmix-xylene meetingdemand of local market and export.

Vung Ro’s top management has also adopted “fast track” method for the project which will allow the combination of front-end engineering design and engineering procurement, construction into one contract to optimise costs and time schedule for the whole project.

According to experts in the field, by implementing “fast track” method, investor could reduce implementation time for the project from at least 18-24 months.

The refinery project will not only help in reducing Vietnam’s reliance on imported fuel, but also mark a milestone for improving investment climate in Phu Yen, a coastal central province located 400 kilometres north of Ho Chi Minh City.

Nguyen Chi Hien, director of Phu Yen Provincial Department of Planning and Investment, said this project would be a magnet luring other industrial supporting projects to Phu Yen.
“Once Vung Ro refinery is constructed, we expect many investors will follow Vung Ro Petroleum Ltd. to invest in petrochemical industry here,” said Hien.

In 2007, a Singapore-based SP Chemicals proposed to build naphtha cracking Hoa Tam complex in Phu Yen. Nevertheless, the company canceled its plan in 2009 due to the global financial crisis.

Hien said the provincial committee still wanted to develop Hoa Tam petrochemical complex, especially now that Vung Ro refinery construction is about to start.

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