Japan’s Idemitsu opens Vietnam’s largest refinery, eying domestic and export markets
HANOI, NNA – Japanese oil company Idemitsu Kosan Co. said Tuesday that Vietnam’s largest refinery is now in operation, processing Kuwaiti crude oil into fuel and other petroleum products as well as petrochemicals used in plastics and resin for export.
Nghi Son Refinery and Petrochemical Complex can refine up to 200,000 barrels per day. It is the second refinery operating in the country and is located 260 kilometers south of Hanoi in Nghi Son Economic Zone in the central province of Thanh Hoa.
The $9 billion project is run jointly by Idemitsu, Mitsui Chemicals Inc., Vietnam Oil and Gas Group (PetroVietnam) and Kuwait Petroleum Europe B.V. (KPE).
Dung Quat Oil Refinery, Vietnam’s first, is in the central province of Quang Ngai and can produce up to 150,000 barrels a day.
“Vietnamese demand for refined petroleum products currently stands at 500,000 barrels per day and is estimated to grow to 600,000 bpd in two to three years, Shintaro Ishida, general director of Nghi Son Refinery and Petrochemical Ltd., told news media in Hanoi.
Idemitsu and KPE have a 35.1 percent stake in the joint venture, with PetroVietnam holding 25.1 percent and Mitsui 4.7 percent. Idemitsu said in a statement that it has invested about $1.4 billion in the project.
Idemitsu and Mitsui will export petrochemical products such as para-xylene, benzene and polypropylene while PetroVietnam will sell gasoline, diesel oil and other fuels in the domestic market.
The operation is expected to appear in Idemitsu earnings in the fiscal year starting in April 2020, Ishida said. Idemitsu has trained 1,000 local workers for the project.
Japanese energy firms are seeking business opportunities in Southeast Asia as demand continues to decline in Japan.
"We are giving high priority to Southeast Asia. We want to utilize the experience in Vietnam for future business development," Idemitsu Executive Vice President Takashi Matsushita told a news conference in Tokyo on Tuesday.