VietNamNet Bridge – Ninety percent of the source of income of the Quang Ngai province comes from the Dung Quat Economic Zone which is comprised of an oil refinery. This explains why many other localities in the central region dream of having such refineries.

According to an expert from PetroVietnam’s Oil and Gas Research Institute, building oil refineries is a kind of insurance which allows to ease the risks in case an energy crisis occurs. In general, other countries maintain the domestic oil refining capacity at 75-90 percent of the domestic demand, according to PFC Energy.

In Vietnam, with the existing oil refineries and the ones to be built in the near future, including the Dung Quat Oil Refinery, the Nghi Son petrochemical and oil refinery, the condensate plants of Phu My, Cat Lai and Can Tho, 80 percent of the domestic demand would be satisfied.

According to Dr. Ho Sy Thoang, an oil and gas expert, Vietnam only has one oil processing plant with the capacity of 6.5 million tons per annum in Dung Quat economic zone in Quang Ngai. The plant just refines oil to make some kinds of fuel, while petrochemistry remains an auxiliary part with a polypropylene workshop with the capacity of 150,000 tons per annum.

With such a production capacity, the Dung Quat Oil Refinery just can satisfy 1/3 of the domestic demand, about 16.5 million tons of products.

When the Nghi Son petrochemical and oil refinery complex with the refining capacity of 10 million tons per annum is put into operation, it, together with Deung Quat, would nearly satisfy the domestic demand by 2012.

However, by the time when Nghi Son becomes operational, slated by 2015 at the soonest, the demand for fuels from petroleum would be higher, at least 5-7 million tons.

Vietnam has Dung Quat which can churn out 6.5 million tons a year and Nghi Son 10 million tons, which means that in four years, Vietnam would have 15-16 million tons of crude oil to be processed.

Meanwhile, some other petrochemical and oil refinery projects have been on the discussion. These include the Long Son project with the expected capacity of 200,000 barrels per day, Vung Ang project (300,000 barrels) and Khanh Hoa (200,000 barrels). The Long Son petrochemical joint venture between PetroVietnam and a Thai partner is under the preparation.

Local newspapers have reported that Thai PTT Group is planning to develop a petrochemical and oil refinery in the Nhon Hoi Economic Zone with the capacity of 30 million tons per annum, capitalized at $28.7 million.

The provincial authorities of Phu Yen and Can Tho reportedly are moving ahead with the oil refinery projects in the two localities as well.

Thoang has warned that it would be too much if all the projects are implemented, because the domestic demand is lower than the estimated capacity of all the refineries.

In case of the oversupply, Vietnam would have to think of exporting its exports. Will Vietnam be able to become a petrochemical and oil refinery center for export like Singapore?

According to Professor Thoang, the petrochemistry and oil refinery industry requires high investment rate, low profitability, advanced technologies, while it causes pollution to the environment. The profit from oil refinery in Singapore is not attractive, while some investors there try to resell the plants. Meanwhile, experts believe that Vietnam would not be able to compete with Singapore in the field.

TBKTSG