The Vietnamese government has approved a master plan to develop the national oil and gas storage system by 2030 with an estimated investment of VND270 trillion ($11.42 billion).
The investment will be sourced mainly from businesses, not from the state budget.
The plan, part of efforts to ensure national power security, will raise Vietnam’s storage capacity of crude oil, refined oil products and gas to 75 to 80 days of net imports, extendable until 90 days.
Specifically, oil storage capacity would increase to at least 20 days of net imports by 2030 and increased further to 25 days after 2030.
Storage of oil for commercial purposes would increase capacity by an additional 2.5-3.5 million cubic meters by 2030. After 2030, total storage capacity would be increased to 10.5 million m3, or 30-35 days of net imports.
Meanwhile, LPG storage capacity will be expanded to reach 800,000 tons by 2030 and to 900,000 tons later.
Total LNG storage capacity would be increased to 20 million tons per year by 2030. This would be doubled to 40 million tons later, according to the national plan signed Tuesday by Deputy Prime Minister Tran Hong Ha.
For the distribution of petroleum and gas products, infrastructure facilities would be upgraded to meet the demand for pipeline transportation from supply sources (oil refineries, petroleum terminals, LPG distribution stations, and terminals for imported LNG) to end users including industrial clients and residents.
The master plan envisages that the national oil and gas storage and supply system develops apace with imports, exports, exploitation, transportation and processing of oil and gas products.
At an oil and gas industry meeting presided over by Deputy PM Ha last March, Minister of Industry and Trade Nguyen Hong Dien said Vietnam’s current fuel storage capacity stood at 65 days of net imports. He also noted that the country was yet to develop a national oil storage hub.
Two operational refineries, third about to open
Vietnam has two operational oil refineries now, namely the Nghi Son Refinery and Petrochemical complex in Thanh Hoa province and the Binh Son Refining and Petrochemical complex in Quang Ngai province, both in the central region.
Nghi Son is a $9 billion refinery co-owned by state-run Petrovietnam, Kuwait Petroleum Europe B.V. (KPE), and Japan’s Mitsui Chemical and Idemitsu Kosan Co.
The other, better known as Dung Quat Refinery, is a Petrovietnam subsidiary that has received investments of more than $3 billion from the giant. It is the country’s first oil refinery.
The Vietnamese government decided in May to expand Dung Quat’s capacity to 171,000 barrels a day by 2028 from the current 148,000 barrels, with an investment of more than $1.2 billion.
The third one, which is the $5.4 billion Long Son petrochemicals complex in the southern province of Ba Ria-Vung Tau, will start commercial productions this September, CEO Roongrote Rangsiyopash of Thai investor Siam Cement Group (SCG) said in a Reuters report in late June.
The complex, about two hours’ drive from Ho Chi Minh City, is in the process of testing its operating units. Testing would be completed next month or in August so that commercial operations can start in September or so, he said.
In addition to the three oil refineries, Hanoi-based multinational group Stavian is investing $1.5 billion in a polypropylene production facility in the northern province of Quang Ninh.
The 600,000 ton-per-year Stavian Quang Yen petrochemical plant is expected to go on stream by 2026. A propane dehydrogenation unit is also planned as part of the project.