Japanese petroleum group JX Nippon Oil & Energy is planning to acquire some 10 per cent stake in Vietnam National Petroleum Group (Petrolimex), for a consideration of 20 billion yen ($177 million), according to the Nikkei.

A filling station of Petrolimex.

Having been in a strategic partnership with the Vietnamese petroleum giant since December 2014, JX Nippon is mulling participation in a refinery project to serve the growing oil market of the Southeast Asian nation with the future deal, the Nikkei reported without citing any sources.

The Japanese company will also help its partner in business issues like gas station management and payment systems.

JX Nippon will also decide whether to participate in a Petrolimex oil refinery project in Van Phong Economic Zone, southern Vietnam, the Nikkei said. Meanwhile, the duo had signed a memorandum of understanding in 2014 to jointly develop the $8-billion facility, which is slated with a processing capacity of 10 million tonnes per year.

It had been earlier learnt that South Korean Daelim failed to seal the tie-up with Petrolimex.

The Vietnamese petroleum firm was privatised in 2011. The entire petrol demand of the country had been previously served by the giant as a monopoly. “However, due to the competitive market following the privatisation, the market share of Petrolimex has dropped to roughly 50 per cent,” Petrolimex posted on its website.

The energy industry in Vietnam was forecast to lead the investment trend in 2016, as projected by the nation’s foreign investment agency. The local government anticipates that foreign direct investment commitment in this sector will see a record high of $4.5 billion this year.

Japan has also been an active investor in this area. Idemitsu Kosan and Mitsui Chemicals are joint venture partners of the $9 billion Nghi Son oil refinery in central Vietnam, expected to be the largest in the country. Along with the other companies in the consortium, including PetroVietnam, and Kuwait Petroleum International , it is looking to expand the project.

In terms of indirect investment, Japanese firms are also keen on holding stakes of Vietnamese businesses. Just recently, also according to the Nikkei, Daiwa Securities said it will boost its ownership in Saigon Securities Inc from the current 10 per cent to some 15 per cent.