PDVSA withdraws from Vietnamese refinery project

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Oct. 9 -- Suddenly reversing an earlier decision, Venezuela’s Petroleos de Venezuela SA withdrew from a project for the construction of a 200,000 b/d refinery at Long Son in Vietnam.

“Initially PDVSA wanted to be involved in the whole process—from supplying crude oil, to financing the transportation, and building the refinery with a total investment capital ranging from $6-7 billion, but it has changed those plans,” said a spokesperson for Petrovietnam.

Phung Dinh Thuc, Petrovietnam chief executive officer, gave no reason for PDVSA's withdrawal from the project in the southern province of Ba Ria Vung Tau, which was initially endorsed by Venezuelan President Hugo Chavez during a visit to Hanoi in 2006.

As recently as Sept. 29, PDVSA Vice-Pres. Eulogio Del Pino said his firm had “advanced its interest” in holding a 30% stake in the $3.77 billion Long Son petrochemical complex.

At the time, Del Pino—who met with Thuc in Caracas—also said PetroMacareo SA, an oil joint venture of Vietnam 40% and Venezuela 60%, would produce crude at the 248-sq-km Junin II block, with half the 200,000 b/d of output going to the refinery at Long Son for processing.

"It is expected that within 18 months the crude oil production process will begin," said Del Pino.

With Venezuela’s withdrawal from the refinery project, Thuc said the Vietnamese firm is seeking other partners, adding that the group will place a priority on investors who are experienced in refining and who can provide crude for the plant.

"Petrovietnam is proactive in talks with Petronas of Malaysia, International Petroleum Investment Co. of the UAE, and Trafigura [Pte Ltd.] of Singapore," Thuc told Vietnam’s Lao Dong newspaper.

A consortium comprised of Petrovietnam, Vietnam National Chemical Corp. (Vinachem), and two Thai partners—Vina SCG Chemical Co. Ltd. and Thai Plastic & Chemicals Public Co. Ltd.—started construction on the Long San complex a year ago.

The petrochemical complex will occupy a 400-hectacre section of the Long Son petroleum industrial park in Long Son commune, Vung Tau city.

Once it begins operation in 2013, the complex’s production is expected to include 1.45 million tonnes/year of polyethylen and polypropylene, 730,000 tpy of chemical materials for production of polyvinyl chloride, and 840,000 tpy of other basic chemicals.

Contact Eric Watkins at hippalus@yahoo.com.

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