Gradually Mastering Refining and Petrochemical Technology

Vietnam has now ensured part of the domestic petroleum supply, contributing to national energy security. Many refinery and petrochemical projects have come into operation, creating the foundation for the development of this industry.

According to the National Institute of Patent and Technology Exploitation (Ministry of Science and Technology), the refining and petrochemical sector has been operating since 1982 with simple and small-scale refineries such as Cat Lai Oil Processing and Refining Plant (belonging to Saigonpetro), Phu My (belonging to Petrovietnam), Can Tho (invested by RPC, a Thailand-based company, and then transferred to Vietnamese investors) and individual petrochemical plants such as two PVC plants (invested by the joint venture of Vinachem-TPC Vina (Thailand) and Petrovietnam-Petronas joint venture), DOP plasticizer factory (invested by Petrovietnam, Vinachem and LG), supporting products for the utilization of PVC which is commonly used in construction. The others include plants producing nitrogen fertilizers from natural gas (Phu My and Ca Mau invested by Petrovietnam).

However, only after Dung Quat Refinery started operating in 2009, the refining and petrochemical value chain from crude oil to a final petrochemical product, PP plastic, has been truly completed. Dung Quat oil refinery is one of the major economic projects, a key national project of Vietnam in the early 21st century, having very important meaning in terms of politics, economy - society, security, national defense, in the process of industrialization and modernization of the country; ensuring national energy security, reducing dependence on petroleum supplies from abroad, creating a foundation and resilience for industrial development in the central coastal region. The birth of Dung Quat oil refinery marks the final stage in the complete cycle of Vietnam's oil and gas industry, from prospecting, exploration and exploitation to transportation, processing, storage, distribution, service and import-export, realizing the Strategy for Development of the Oil and Gas Industry in Vietnam.

With the first oil refinery, Vietnam has met nearly 40% of the domestic petroleum demand. The step-by-step self-operating of a complex factory has confirmed the capacity of Vietnamese experts, engineers and workers. After 12 years from the date of launching the first product line, the product structure of Dung Quat refinery has been increasingly diversified. In addition to traditional products such as RON 92 gasoline, RON 95 gasoline, Diesel Auto, Propylene gas and PP resins, liquefied petroleum gas (LPG), kerosene, Jet A1 aviation fuel, fuel oil (FO), currently Dung Quat has produced new products such as E5 RON 92 gasoline, Jet A-1K jet fuel, L-62 Diesel fuel used on weapons, military equipment and special equipment.

Since being put into operation, Dung Quat refinery has always operated stably at 100-107% capacity. By the end of 2020, the factory imported more than 77 million tons of crude oil and consumed more than 70 million tons of products; had revenue over US$49 billion; submitted more than US$7 billion to the State budget. Compared with the investment capital of more than US$3 billion, the amount of money the State collecting from Dung Quat oil refinery has more than doubled. More importantly, with Dung Quat refinery, Vietnam has become partly self-sufficient, ensuring national energy security.

With the experience and knowledge from the construction of Dung Quat oil refinery, Vietnam has confidently deployed the Nghi Son refining and petrochemical complex and Long Son petrochemical complex, as well as putting a number of other complexes/refineries into operation, Vietnam's refining and petrochemical industry began to develop from oil refining to petrochemicals and petrochemicals from natural gas. It can be said that the successful construction and operation of Dung Quat oil refinery has laid the first bricks and realized the aspiration of building and developing Vietnam's refining and petrochemical industry.

In recent years, Vietnam has successively launched a series of multi-billion-dollar refinery and petrochemical projects. Vietnam's refining and petrochemical capacity has tripled in five years, from 140,000 barrels/day in 2016 to 500,720 barrels/day in 2020, with two new refineries including Nghi Son (200,000 barrels/day) and Vung Ro (160,720 barrels/day).

Regarding petrochemical products, so far, the biggest achievement of Vietnam's petrochemical industry is the construction of two fertilizer plants in Ba Ria - Vung Tau and Ca Mau with a total capacity of 1.6 million tons/year. The need to expand and move Dung Quat oil refinery in the direction of increasing the proportion of petrochemical products is very urgent. With very favorable conditions in accessing natural gas from Ca Voi Xanh field (off the coast of Central Vietnam), the deployment of petrochemical production here is feasible.

According to experts, combining refining and petrochemicals in one plant to increase profits has been popular in the world and Vietnam will not be an exception to that trend. The existing refining and petrochemical plants such as Dung Quat, Nghi Son, Long Son will be upgraded to be able to process low-quality crude oils into cleaner and less polluted products. Products will be diversified, in addition to gasoline, there will be additional types of asphalt, lubricants, sulfur and many new types of intermediate and finished petrochemical products. In addition, petrochemical products will be produced by using modern and advanced technology, focusing on petrochemicals from natural gas, the strength of Vietnam in the future with gas fields stretching offshore from the North to the South.

By Huong Giang, Vietnam Business Forum