Dung Quat refinery
is a under construction oil refinery in Quang Ngai Province
. It is expected to become operational in February 2009, and it would be the first oil refinery in Vietnam.
The refinery project started already in 1980s. The refinery was planned to be construct near the port of Vung Tau
, just away from the offshore oil fields. In 1988, the clearence of the construction site from unexploded wartime ordnance was started. However, in 1991 the refinery project was shelved. In the early 1990s Total SA
expressed interest to the project. At the same time the Vietnamese government suggested to move the site to Van Phong bay, north of Nha Trang
, and later further north to Dung Quat. Followed this, in 1995 Total SA pulled out, claiming that the new site made no economic sense. Total was replaced with a consortium of foreign investors, including LG Group
, but also this consurtium withdraw two years later.
In 1998, establishment of VietRoss, a joint venture of Vietnam and Russia, was decided. The intergovernmental agreement on the construction and operation of the refinery was signed on 25 August 1998. The Front End Engineering Design (FEED) Contract was signed between Petrovietnam, Zarubezhneft and Foster Wheeler Energy. The Dung Quat Refinery was originally scheduled to start work in 2000, but the process was several times delayed. On 25 December 2002, the intergovernmental agreement between Vietnam and Russia was terminated, and the project continued as a solo project of Petrovietnam.
On 24 October 2003, the project management consultancy services contract was signed with Stone & Webster, and on 27 February 2004 the contract for front end engineering design (FEED) development was signed with Technip. The construction started on 28 November 2005.
Dung Quat refinery has a designed capacity of 6.5 million tons of crude oil annually, or 130,000 barrels per day. In addition to fuels, the refinerywill also produce petro-chemical products. The refinery complex area comprises:
- Overall Refinery Process, Utility and Offsites Facilities: about 110 ha;
- Crude Tank Farm and Flare Area: about 42 ha;
- Product Tank Farm: about 36 ha;
- Seawater intake, Waste Water and Crude Oil Pipelines: about 4 ha;
- Interconnecting Pipelines, road and right of Way: about 40 ha;
- Product Harbour Service Area: about 135 ha.
The refinery is expected to cost US$2.5 billion. Main contractors of the refinery are Technip, JGC, and Technicas Reunidas.
Critics of the project claim that the refinery is non-feasible, and the location is chosen for political, not economical reasons, as most of oil comes from offshore fields in Southern Vietnam.