Sunday, September 23, 2007

Construction of Vietnam's Dung Quat oil refinery nears the finish line

Chairman of central Quang Ngai Province People’s Committee, Dr Nguyen Kim Hieu, discussed the Dung Quat Industrial Zone’s conversion into an economic zone with Thoi bao Kinh te Viet Nam (Vietnam Economic Times) newspaper.

Can you tell me how close the Oil Refinery No 1 project in Dung Quat is to completion?

The project was approved by the Prime Minister seven years ago in July 1997.

The oil refinery should have been completed and put into operation by now. But this is the first large scale oil refinery project in Viet Nam, and we have little experience in carrying out such a project. Because of our lack of experience, we faced problems managing a joint-venture investment scheme that was part of the project.

Currently, the Government, ministries, and related offices are trying to solve such problems to assure the oil refinery gets completed, which is expected to be in 2007.

With the oil refinery as its centre, the Dung Quat Industrial Zone will be home to many large scale industries. How many investment projects are licensed to operate in Dung Quat and what is their status?

So far, 37 projects have been allowed to operate in Dung Quat Industrial Zone (IZ), not including the oil refinery, with a total registered capital of VND11.4 trillion (US$735 million). Of them, 12 projects have been put into operation; 11 are being constructed; and the others are still being prepared.

It is expected that 20 other projects will be licensed this year, with a total capital of VND3 trillion($191million).

Among these projects, some are very big, such as a shipyard to build and repair marine vessels up to 400,000 dead weight tonnes (DWT). It will lie on 110ha of land and cost VND4.8 trillion. A similar large project will be a steel laminating factory, with a capacity of 400,000 tonnes a year; and two wharves.

Other large scaled projects include: a coal processing factory, a car tire factory, and two electricity generating stations.

What about the construction of ports for Dung Quat?

Dung Quat’s wharf No 1 has been designed for vessels up to 10,000 DWT. However, because the local enterprises need to have a port for ships up to 15,000 DWT to enter, the province has widened the wharf’s marine passage. This has increased the cargo volume transported through the port, from 50,000 tonnes in 2002 to 200,000 tonnes last year. We expect it to receive 400,000 tonnes this year and 1 million tonnes next year.

As for the deep-sea port of Dung Quat, the Viet Nam National Shipping Lines (VINALINES), and the GEMADEPT (a transport joint-stock company) were given permission from the Ministry of Transport to invest in building two new wharves. Some marine port construction groups from Japan and Singapore are also surveying the area.

With its scale, features, and development direction, Dung Quat seems to be an economic zone (EZ), which is better than an IZ. Its management board and the provincial People’s Committee have proposed the State to turn Dung Quat in to an EZ. What about this conversion?

We believe that the plan to change Dung Quat IZ to be an EZ will be considered and approved by the Party and the Government. In this case, the zone’s development speed will be accelerated. Along with the Chu Lai open economic zone in the nearby Quang Nam Province, Dung Quat will be a leader in central Viet Nam’s development. It will become the third economic area of the country. — VNS