Production to start at Kuwaiti co-owned Vietnam refinery

09 August 2018
Nghi Son refinery will undergo trial production in September and will commence commercial operation by mid-November

Nghi Son refinery in Vietnam, co-owned by state-run Kuwait Petroleum International (KPI), is to start trial production by September, and eventually ramp up production, according to a local media report. This comes after a 16-month delay due to faulty construction.

The $9bn scheme, set to be Vietnam’s largest refining facility, is on track to reach its processing limit of 200,000 barrels a day of crude in September, after which it will complete the performance tests and documentation needed to operate commercially, a key project official has been quoted as saying.

Full commercial operations are scheduled to begin by mid-November.

KPI has a 35.1 per cent stake in the downstream complex, Japan’s Idemitsu Kosan Company another 35.1 per cent, state-owned PetroVietnam 25.1 per cent and Japan’s Mitsui Chemicals holding the remaining 4.7 per cent of the share.

The joint venture, known officially as Nghi Son Refinery and Petrochemical Company, had to delay the start of full operations mostly because of “welding defects” and other construction faults, the official said.

The refinery will enable Vietnam to cut diesel and gasoline imports from other Asian countries, including South Korea, Singapore and Malaysia, because it will process Kuwaiti crude.

Nghi Son will start producing polypropylene and other petrochemicals in 2019, selling them to its Japanese and Kuwait partners.

Engineering, procurement and construction (EPC) of the project was done by a consortium led by Japan’s JGC Corporation, and included Chiyoda Corporation (Japan), GS Engineering & Construction Corporation (South Korea), SK Engineering & Construction (South Korea), Technip (France) and Technip Geoproduction (Malaysia).

About 70 per cent of the construction costs were be financed through the Japan Bank for International Cooperation.

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