Technip Wins EPC Deal to Equip Vietnam's First Oil Refinery

Technip Wins EPC Deal to Equip Vietnam's First Oil Refinery

Vietnam's State-owned oil and gas monopoly, PetroVietnam, signed an engineering procurement and construction (EPC) contract with a four-party consortium led by France's Technip Conflexip for the construction of main facilities of the Dung Quat oil refinery after an extended period of negotiations.

The contract includes construction of works in Bid 1 and Bid 4, the central elements in equipping and operating the refinery, said Tran Ngoc Canh, PetroVietnam general director.

The two bid packages were estimated at a cost of US$1.56 billion, higher than the initial US$700-800 million listed on the project specifications.

The overall estimated cost of the refinery has escalated to US$2.5 billion from an initial calculated US$1.3 billion.

The long-delayed Dung Quat refinery with an annual processing capacity of 6.5 million tons of crude will turn out liquefied petroleum gas (LPG), propylene, non-lead petrol A90, A92 and A95, kerosene, diesel oil, fuel oil and jet fuel. Petrol and diesel oil will account for 80 per cent of the total output.

When the refinery comes into operation, it will meet 40 per cent of the local market demand for petrol, Canh said.

Other contractors in the French-led consortium that signed the EPC pact include Malaysia’s Technip Geoproduction, Japan’s Gasoline Corp (JGC) and Spain’s Technicas Reunidas.

The consortium will take 44 months from when the contract takes effect on June 25 to complete 14 works under the EPC, the PetroVietnam boss said.

The Dung Quat refinery is located in central Quang Ngai province, around 850 kilometers south of Hanoi.

• VNS, Youth