Saturday, January 26, 2008

Vietnam's Petechim in deal to supply crude to Dung Quat refinery

Singapore (Platts)--25Jan2008
The PetroVietnam Trading Corporation, more commonly known as Petechim,
has signed a contract with state-run PetroVietnam to supply the latter's maiden Dung Quat refinery with 6.5 million mt/year of crude when the plant goes into operation in 2009, the Vietnam News Agency reported January 24.
     The Dung Quat refinery, in the central province of Quang Ngai, will have a nameplate capacity of 6.5 million mt/year (around 130,000 b/d) and will meet 30% of domestic demand.
     The refinery will use local Bach Ho crude for the first five to seven years after which it would use a combination of Bach Ho and Dubai crude in a 85:15 ratio, according to PetroVietnam, which owns 100% of the project.
     The refinery will mainly produce gasoline (41%) and gasoil (40%)
compliant with Euro II emission standards.
     PetroVietnam has also signed preliminary deals with Dutch trader
Trafigura and Swiss-based oil trader Glencore to meet long-term domestic needs for crude oil.
     From being a crude oil exporter, Vietnam is going to turn into a net importer with several refinery projects in the pipeline. 
     PetroVietnam is planning a second refinery project in Nghi Son in the northern province of Thanh Hoa. This plant will have a a nameplate capacity of 7 million-8.4 million mt/year and is targeted to begin operations before 2015.
The refinery will process 100% sour Middle East crude.
     Separately, PetroVietnam is working with Venezuela's PDVSA on a detailed feasibility study for a third refinery project. This refinery, to be located either at Long Son or Ba Ria in the southern province of Vung Tau, is expected to have a nameplate capacity of 10 million mt/year and is also targeted to begin operations by 2015. It will process 100% Venezuelan crude.
--Mriganka Jaipuriyar, mriganka@platts.com