Idemitsu lines up group for $9bn Vietnam refinery

Reuters/TokyoJapan’s Idemitsu Kosan Co said yesterday it and its partners planned to award a consortium including engineering firm JGC Corp a contract to construct the $9bn 200,000 barrels per day (bpd) Nghi Son refinery and chemical complex in Vietnam.Idemitsu, Japan’s third-largest refiner, said in a statement it and partners had issued a letter of award for the consortium to construct the project.“Effectively, this means telling the builders our intent to make positive progress toward construction,” Idemitsu’s Executive vice-president Kenichi Matsui told reporters.The construction of the refinery in Vietnam’s northern province of Thanh Hoa, 215km (134 miles) south of Hanoi, is scheduled to be complete around autumn of 2016, with commercial operations to start in the second quarter of 2017.A final investment decision on the refinery is expected sometime between spring and June, with construction to begin in the second quarter, Idemitsu officials said.The consortium is seeking to complete $5bn worth of project finance in the next few months, and the rest would be financed by investors in the project, including $1.4bn to be defrayed by Idemitsu.Other members of the building consortium are Japan’s Chiyoda Corp, South Korea’s GS Engineering & Construction Corp, SK Engineering & Construction Co and Technip of France.Idemitsu has a 35.1% stake in the project, and other investors are state oil and gas group Petrovietnam (25.1%), Kuwait Petroleum International (35.1%) and Mitsui Chemicals (4.7%).The refinery’s feedstock will be Kuwaiti heavy crude oil.With the 150,000-bpd Dung Quat oil refinery, Vietnam’s first refinery, the two refineries will meet Vietnam’s domestic oil product consumption of 350,000 bpd, with the limited possibility for oil product exports but some scope for chemical product exports, Idemitsu said.Main facilities at the Nghi Son refinery and chemical complex are a 200,000 bpd crude distillation unit (CDU), a 105,000 bpd residue hydro desulphurisation unit (RHDS) and an 80,000 bpd residue fluid catalytic cracking unit (RFCC).The aroma complex would also have capacity to make 700,000 tonnes per year of paraxylene, 240,000 tpy of benzene and 370,000 tpy of polypropylene. The RFCC would also have capacity to produce 20,000 bpd of propylene.The consortium is not considering building a naphtha cracker, Idemitsu officials said.