Binh Son Refining and Petrochemical JSC (BSR), the operator of Dung Quat oil refinery and a subsidiary of state-owned Petrovietnam, is set to spend VND36,397 billion ($1.49 billion) on expanding the refinery.
In a filing to the stock market regulator last week, BSR, also the project investor, said the move would expand the Dung Quat oil refinery's capacity by 16% to 171,000 barrels per day or 7.6 million tons a year.
The expansion also aims to make products fulfil Euro V emission standards and other environmental requirements, while improving the facility’s flexibility to refine different kinds of crude oil.
Additionally, the move will add production lines for manufacturing hydrogen, processing petroleum and diesel with hydrogen, processing alkyl chemicals, and recovering sulfur.
BSR aims to complete and put the 51.67-hectare expansion, located in Vietnam’s central province of Quang Ngai, into operation in 2028, after 37 months of construction.
In its filing, BSR said CEO Bui Ngoc Duong has been tasked with supervising the project and selecting the EPC (engineering, procurement and construction) contractor(s) for the move.
Petrovietnam has been planning the upgrade of Dung Quat oil refinery for years, one of two operational refineries in Vietnam. The facility, the first of its kind in the Southeast Asian nation, began commercial operation in 2009, fulfilling 30% of domestic demand for gasoline in Vietnam.
The other is Nghi Son refinery and petrochemical complex in Thanh Hoa province, also central Vietnam. Meanwhile, the $5.4 billion Long Son Petrochemicals Complex, invested by Thailand’s SCG Chemicals, began a full trial run in January.
In 2014, Petrovietnam issued an expansion plan for Dung Quat oil refinery. However, the $1.8 billion plan did not receive approval regarding its environmental impacts from the Ministry of Natural Resources and Environment.
In its latest proposal drafted in 2022, Petrovietnam set a target of completing the upgrade in the fourth quarter of 2025 and beginning commercial operations in the first quarter of 2026.