Province, PVN disagree on $27 bln refinery project Tuoitrenews Binh Dinh’s provincial government and state-run oil and gas PetroVietnam do not see eye to eye on a project that aims to set up a US$27 billion refinery in the coastal province. While local authorities are speeding up talks with the investor -- Thai state-owned oil and gas company PTT Public Company Limited, PetroVietnam (PVN) strongly voiced its protest. The refinery, to be located at the Nhon Hoi Economic Zone, is expected to be capable of handling some 660,000 barrels a day, or 30 million tons of crude oil a year, five times higher than that of the Quang Ngai-based Dung Quat Refinery – Vietnam’s sole refinery for the time being. Talks over the deal was initiated between PTT and Binh Dinh government more than a year ago, and the province has lodged a document to the Prime Minister asking for a go-ahead. However, PVN, the investor of Dung Quat, immediately filed its protest to the Ministry of Industry and Trade, expressing frankly that the project should never be approved. PVN is now spending money on the second refinery, the Nghi Son facility in Thanh Hoa Province. Surplus concern The Nhon Hoi refinery is not in the master plan of the oil and gas sector between 2015 and 2025, the state-run company said, adding that the location designated for the project is too close to those of other refinery facilities including Vung Ro, Van Phong, and Dung Quat. “The prefeasibility report also fails to appropriately evaluate several important factors such as the crude oil supply capacity, and the financial ability of the investor and its partners,” PVN said. The most important reason is that the Nhon Hoi refinery may create a supply surplus for the domestic fuel market by 2025, PVN said. PVN is currently in charge of buying and distributing products from Dung Quat, and is set to do so with two more refineries by 2025. “The presence of Nhon Hoi refinery will thus affect PVN’s purchasing of the products from the three facilities,” it said. “PVN thus demands that the industry and trade ministry not approve the Nhon Hoi project to avoid causing supply and demand imbalance,” the company concluded. Province supports; ministry says OK in long term Following the PVN protests, Binh Dinh authorities asserted that the project is highly feasible, according to Ho Quoc Dung, deputy chairman of the province People’s Committee. “There is already a port to transport the refinery’s products inside the economic zone, and we will also build a 2-km pipeline system to flow crude oil to the facility,” Dung told Tuoi Tre. “These are advantages for Nhon Hoi that other refinery projects do not have.” The feasibility is also grounded in the fact that the investor is a state-owned company whose total assets are more than $50 billion, he said. “HSBC has also pledged to financially support the project and the province will lease a 2,000-hectare land plot to the investor at preferential prices of only $10 a square meter in 50 years,” he added. Meanwhile, the Ministry of Industry and Trade has filed an opposite opinion from PVN to the Prime Minister. The ministry proposed to have the Nhon Hoi project added into the oil and gas development master plan by 2025, while demanding that the investor meet a number of requirements regarding financial ability and product-consumption solutions. No more info for now In the latest development, the investor PTT asserted that it will not elaborate any information about the project until the Vietnamese government releases official information, company representative Pireeyutma Vanapruk told Tuoi Tre on Tuesday. Since PTT is a state-owned and a listed company, it will not release any information that may affect its value on the stock market, he said, citing response from PTT deputy CEO Sukrit Surabotsopon. Meanwhile, Binh Dinh chief officials are scheduled to work with PTT in Thailand from May 2 to 4 on the project, according to a source close to the matter. The parties are expected to discuss the concerns raised by PVN and other issues including financial ability, technology, and crude oil supply.