The latest report of the State’s steering committee on major petrochemical projects shows that many projects have been going more slowly than scheduled. 

These include the Dung Quat Oil Refinery expansion, Nghi Son Petrochemical and Refinery and the Southern Petrochemical Complex.

As for Dung Quat, the negotiation with Russian Gazprom Neft (GPN) on the frame agreement on the Russian group purchase of 49 percent of Binh Son Petrochemical Company has failed to wrap up by June 30.

This was due to big differences in valuation and complicated procedures for settling BSR’s debts.

The implementation of the $9.9 billion Nghi Son petrochemical and refinery project is now on schedule after the plan was adjusted. 

By the end of April, 44.79 percent of total work had been done, which means that the plan to finish in 40 months is within reach. 

However, the project implementation is still 5.5 months late compared with the initial plan.

This was attributed to equipment manufacturers and suppliers which could not deliver products as promised because of their troubles, such as the bankruptcy of TSM and Wooyang, the strike at Hyundai Heavy Industries and the shutting down of Posco Plantec in Ulsan due to the financial crisis. 

The problems of the $2.7 billion Long Son petrochemical and refinery project in Ba Ria – Vung Tau province are due to the internal affairs of the Qatar’s investor: the merger of QPI, a capital contributor, to the holding company QP has not been completed. 

Therefore, the investor’s representatives have not joined the management board of the Long Son Petrochemical and Refinery Company. As a result, the business plans of the company cannot be approved.

Tran Viet Ngai, chair of the Vietnam Energy Association, noted that the petrochemical projects all play very important roles in Vietnam’s oil and gas industry development strategy.

The slow implementation of the projects will have negative influences on strategy implementation.

“The slow pace of the projects does not affect macroeconomy in the immediate time because most projects have not become operational. However, this obviously will influence the petrochemistry industry development plan,” Ngai said.

The expected profits of petrochemical projects do not come from oil refinery and petrol products, but in petrochemistry, such as making asphalt and polymer.

As such, the projects’ lack of progress will affect the development of Vietnam’s young petrochemistry industry.

“Vietnam has great potential for petrochemistry industry and we need to develop the industry to make products for domestic demand and export. However, it will be useless if the licensed projects remain stuck,” Ngai said.

NLD