Russian ALT Group to Set up JV for US$4B Oil Refinery in Central Vietnam

1:25:20 PM | 1/27/2010

Russian ALT Group will set up a joint venture with a Vietnamese partner to build a US$4-billion refinery in Vietnam’s central province of Binh Dinh, said the Nhon Hoi Economic Zone Management Authority Director Man Ngoc Ly.

ALT and Khang Thong Construction, Trading and Service JSC had signed a memorandum of understanding with the provincial government to build the refinery in a non-tariff area in the zone, the Vietnam Investment Review reported Monday, citing Ly.

Once fully operational, the hoped refinery will be capable to refine three million tons of crude oil per year, Ly said.

Recently, ALT and Khang Thong sent delegations to the province to carry out studies on the project that had received approval in principle by Prime Minister and the Ministry of Industry and Trade, he attributed.

The investors are seeking Deustche Bank to appraise the project before submitting a feasibility study to the provincial government for approval.

Ly said another Russian company wanted to be involved in the project and if everything goes smoothly it will hold a 50% stake in the refinery while ALT and Khang Thong will own the remaining 50%.

Vietnam’s first oil refinery Dung Quat, which became operational on Feb. 22, 2009, produced a total of 1.5 million tons of products, supplied 1.4 million tons of products to the domestic, earned revenues of VND21.5 trillion last year.

Earlier, Dinh La Thang, chairman of the state-run Vietnam Oil and Gas Group (PetroVietnam) said Vietnam will stop pouring money into oil refineries with an annual refining capacity of less than 6.5 million tons of crude oil each to ensure the investment effect of oil refineries. (VIR)