Heavyweight petro project on target

Vietnam's largest petrol terminal on the central Khanh Hoa province's Van Phong Bay will not open until 2010, two-years later than expected.

Petrolimex general director Bui Ngoc Bao last week said slow land clearance and administrative progress principally caused the delay.

"We are trying our best to open the Van Phong petrol terminal as soon as 2010," Bao said, refuting claims financial impotency amid the global economic malaise would hurt the project.

Licensed in February, 2006 the Van Phong terminal, jointly developed by state-run Petrolimex, its subsidiary Petrolimex Joint Stock Insurance Co (PJICO) and Singapore PB Tankers Ltd, will be built to shelter Vietnam's oil market from fluctuating global prices.

Petrolimex is the joint venture's leading share holder with a 55% stake, the Singaporean firm (30%) and PJICO (15%).

With registered investment capital of US$100 million, the project will cover 56 hectare of land and 42ha of water surface and will have a designed storage capacity of one million tonnes of petroleum products.

Investors initially hoped to develop the terminal, known as a bonded warehouse, into a central storage facility to distribute 5 -6 million cubic metres of petroleum products annually to Vietnam and neighbouring markets.

According to a Van Phong Economic Zone Management Authority report, the Van Phong investors disbursed an estimated US$21.2 million by the end of 2008 on site clearance, construction of offices and wharves.

Bao told VIR that Petrolimex was also drawing-up preparations for a US$5 billion oil refinery and petrochemical complex close to the Van Phong terminal.

The complex, in which Sinopex has shown interest to be a foreign partner, received the government's green light last December, allowing it to be listed in Vietnam's oil and gas development strategy.

"We are currently in the stages of negotiating with foreign partners over investment cooperation terms. In our plan, Petrolimex will not be a major shareholder in response to the government's call for foreign investment in the strategic oil and gas sector," Bao said.

Petrolimex's proposed oil refinery and petrochemical complex, Nam Van Phong, will expectedly open its doors in 2013 with an annual output of roughly 10 million tonnes of petroleum products.

Bao wanted to see quick progress in the Nam Van Phong project to compete with other rivals.

Petrolimex presently has 55-57% of Vietnam's petroleum market shares and in 2008 earned almost US$60 million in profit amidst the country's economic slowdown. (SGT)
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