BP to supply crude oil to Vietnam's Dung Quat refinery
BP PLC has signed an agreement with state-run Petrovietnam Oil Corp. and operator Binh Son Refinery Co. to supply crude oil to Vietnam's 130,000-b/d Dung Quat Refinery starting on Feb. 25.
Oil Diplomacy Editor
LOS ANGELES, Jan. 14 -- BP PLC has signed an agreement with state-run Petrovietnam Oil Corp. and operator Binh Son Refinery Co. to supply oil to Vietnam's 130,000-b/d Dung Quat refinery starting on Feb. 25.
Petrovietnam will negotiate with BP over the purchase of as much as 70,000 b/d of crude, which will gradually replace output from Vietnam's Bach Ho (White Tiger) field.
Analyst BMI said delivery of the crude will "pave the way" for BP to acquire at least part of the 49% stake open in Dung Quat. BMI cited a statement by Petrovietnam Chairman Dinh La Thang that international partners committed to supplying crude would be given preference as stakeholders in the facility.
Originally Petrovietnam had planned to run the Dung Quat refinery on domestically produced Bach Ho oil, but it decided instead to bolster its foreign exchange earnings by using more imported Middle East oil and reserving Bach Ho for export markets.
The Dung Quat refinery, which is scheduled to begin operations on Feb. 25, is designed to process 3.5 million tonnes of oil during 2009, while its capacity is eventually set to increase to 6.5 million tonnes/year.
When it is fully operational, the Dung Quat refinery will meet 30% of domestic demand, producing LPG, propylene, 90RON and 92RON gasoline, kerosine, Jet A1, diesel oil, and fuel oil.
Earlier this week, Petrovietnam announced plans to build a 2 million-tonne underground storage facility at Long Son in Ba Ria-Vung Tau Province that is designed to hold oil products from the Dung Quat refinery.
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