Second Oil Refinery Negotiations Make Progress

3:46:33 PM | 8/9/2012

Japan's third-biggest oil refiner Idemitsu Kosan is entering the final stage of talks on Nghi Son project, the second oil refinery in Vietnam, with an estimated investment of US$8-10 billion.
“We are in final stages (of talks), there is no big problem with Vietnam, and the talks are not at a deadlock,” Shunichi Kito, an executive officer of Idemitsu, said at a press briefing in Tokyo on August 7.
He said funding for the project which is designed to churn out 200,000 barrels per day has largely been lined up, and his company will make a decision on the investment very soon.
The project has yet to get off the ground due to financial problems since it was launched four years ago. However, the bottleneck has recently been removed after the Vietnamese government agreed to guarantee some liabilities of the project.
Yet, it will not guarantee any loans of the project, Do Van Hau, General Director of the Vietnam Oil and Gas Group (PetroVietnam), told Down Jones Newswire on August 7.
Idemitsu Kosan and Kuwait Petroleum International (KPI) will hold 35.1 percent of stakes each in Nghi Son project. Meanwhile, PetroVietnam and Mitsui Chemicals will take 25.1 percent and 4.7 percent of stakes, respectively.
Earlier in July, PetroVietnam annouced that the Nghi Son refinery might start construction in the third quarter of the year. It has been designed to refine crude oil imported from Kuwait, while Kuwait Petroleum was committed to providing all the input materials to the refinery.