Russia’s ALT Group and its Vietnamese partner have underlined their commitment to building an oil refinery in Vietnam.
The Nhon Hoi Economic Zone Management Authority reported that ALT Group and Khang Thong had signed a memorandum of understanding with Binh Dinh province that they would build a refinery within the economic zone’s non-tariff area. Once operational, the $4 billion refinery will supply three million tonnes of crude oil per year.
“The memorandum of understanding indicates ALT and Khang Thong are very serious about this project and Binh Dinh provincial authorities will create favourable conditions for the development of the refinery,” said Nhon Hoi Economic Zone Management Authority director Man Ngoc Ly.
Previously, ALT and Khang Thong sent delegations to the province to study the project’s feasibility. The Ministry of Industry and Trade and the Prime Minister had approved the project in principle, said Ly.
ALT and Khang Thong will also build a deep-seaport to serve the refinery, which will utilise imported crude oil.
The investors are asking Deustche Bank to appraise the project before submitting a feasibility study to Binh Dinh province for approval.
Last week, Khang Thong broke ground on the $216 million non-tariff area in the Nhon Hoi Economic Zone. Ly said another Russian company wanted to be involved in the refinery’s development.
“The company said it had experience and modern environment friendly technology to build the refinery. Currently, the Russian company is discussing the project with ALT and Khang Thong,” said Ly.
He said the company could hold a 50 per cent stake in the refinery, while ALT and Khang Thong hold the remaining 50 per cent.
Vietnam has been encouraging investors to build oil refineries in the country, aiming to reduce its reliance on petroleum product imports.
Vietnam now has only one refinery Dung Quat, operating in the central Quang Ngai province, with an initial refining capacity of 6.5 million tonnes per year. Meanwhile, other licenced and approved projects such as Nghi Son, Vung Ro, Can Tho and South Van Phong refineries are under construction.
The government is now also calling for investment in Long Son refinery project in southern Ba Ria-Vung Tau province.
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