Vietnam aborts US$22bn oil refinery

LOCAL government authorities in Vietnam have cancelled a US$22bn oil refinery project, citing project delays, environmental concerns and disagreements with investor demands for the decision, according to local media.

The 400,000 bbl/d Nhon Hoi Oil Refinery and Petrochemical Complex was due to break ground this year, with commissioning planned for 2021.

Ho Quoc Dung, leader of the People’s Committee in Binh Dinh province, south-central Vietnam, explained to reporters on Friday that the delay in implementing the project after three years of registration for investment affected its feasibility.

He also expressed concerns about how the project would impact the environment of the province’s capital Quy Nhon, and said it has affected the province’s attractiveness for other investment opportunities.

The details of the disagreements between the government and the investors were not provided by Dung.

Thai state-owned energy company PTT originally proposed a US$28bn refinery in 2013, before being revised down in 2014. The project received strong objections from state giant PetroVietnam, which claimed that the plant would create an oversupply of oil in the country.

PTT entered an investment partnership with Saudi Aramco and the project received the backing of the Vietnamese government in 2014.

Thanh Nien News reported PTT delayed its feasibility study of the project that year after a political crisis in Thailand. The investors did not apply for a licence in Q2 of 2015, stating another partner was needed.

PTT was reported to have withdrawn from the project last month due to difficulties with the low oil price.