According to PetroVietnam, the domestic market's gasoline consumption demand in 2020 was 18 million tons and will reach about 25 million tons in 2025, and then up to 33 million tons in 2030 and continue to increase later.

The current domestic supply of petroleum, including sources from the Dung Quat Refinery, Nghi Son Refinery and condensate processing plants, is about 12.2 million tons and is expected to increase to about 13.5 million tons after the expansion of the Dung Quat Oil Refinery.

The current domestic production capacity meets about 70% of demand for petroleum products at the present time and will fall to only 40% in 2030 and 20% in 2045.

At that time, Vietnam will face a shortage of petroleum products, estimated at 19.5 million tons in 2030, about 25 million tons in 2035 and up to 49 million tons in 2045.

The current domestic petroleum reserve is enough for 10 days of consumption, so Vietnam depends on the stability of supply of petroleum from imported sources. Moreover, petroleum and petrochemical products have specific characteristics, so it takes time to order in advance.

For petrochemicals, domestic consumption of main and popular petrochemical products in 2020 was 9.2 million tons, forecasted to increase to 11.9 million tons by 2025 and 32.9 million tons by 2045.

Vietnam has two petrochemical refineries, including Dung Quat Oil Refinery, which operates with a capacity of 5.8 million tons of petroleum and 150,000 tons of PP per year, but it is difficult to expand and change new technology.

The Nghi Son Refinery and Petrochemical Complex (NSRP), which was put into operation in 2018, is unstable and heavily influenced and decided by foreign investors with a capacity of 6.5 million tons of gasoline and 340,000 tons of PP/year.

The Southern Petrochemical Complex, wholly invested by SCG Group (Thailand), is about to come into operation. Hyosung's petrochemical plant is expected to be put into operation in 2022-2023 with 0.96 million tons of PP products and 0.95 million tons/year of PE products.

Vietnam's production capacity of petroleum products is much lower than demand. Every year, the country has to spend billions of USD to import petrochemical products to serve the needs of domestic demand.

In this situation, PetroVietnam has suggested investing in a complex of advanced technology and modern petrochemicals that will benefit the group and the country as a whole.

It is expected that this project will make the most of domestic crude oil, gas and condensate raw materials. The remaining crude oil materials will be imported from the Middle East and the US.

The complex would be divided into two parts: the oil refinery and a national storage project for crude oil and petroleum products.

The petrochemical refining project phase 1 has a capacity of 12-13 million tons of crude oil/year; and 0.66 million tons of condensate, LPG and Ethane per year. The output of the plant will be 7-9 million tons of petroleum and 2-3 million tons of petrochemicals/year.

In phase 2 of development, this project will produce 3-5 million tons of petroleum and 5.5-7.5 million tons of petrochemicals per year.

The national reserve of crude oil and petroleum products will store 1 million tons of crude oil and 500,000 m3 of petroleum products per year.

PetroVietnam expects to submit the documents to the Government for consideration and approval of the investment policy in January 2023. The feasibility study report will be prepared from June to December 2023 and the investment decision will be approved in the first quarter of 2024. After that, the EPC contractor will be selected and the construction will be implemented from January 2024 to December 2027.

The preliminary estimate of the total investment of the whole project in phase 1 is from 12.5 - 13.5 billion USD and 4.5 - 4.8 billion USD for phase 2.

Dau Tu