Vietnam fast-tracks strategic oil reserve project at Nghi Son Economic Zone to bolster energy security

Prime Minister Pham Minh Chinh has ordered the accelerated development of a national crude oil reserve in Nghi Son Economic Zone in Vietnam’s central province of Thanh Hoa, underscoring the project’s strategic role in safeguarding energy security and supporting economic growth.

At a government standing committee meeting on Wednesday, the prime minister said the project now has sufficient political, legal and practical foundations, signaling a shift from planning to execution. “We only discuss implementation, not delays,” he stressed, underscoring the urgency as Vietnam faces rising fuel demand and continued reliance on imported crude.

The planned crude storage facility forms part of Vietnam’s broader energy infrastructure strategy for 2021-2030, with a vision to 2050. As fuel demand rises and dependence on imported crude remains high, the reserve is expected to act as a buffer against global supply disruptions and price volatility.

The facility will also enhance operational efficiency at the nearby Nghi Son Refinery and Petrochemical Complex, while strengthening the country’s overall fuel supply chain.

At the meeting, the government chief agreed on a state-led investment model in the initial phase, tasking state-owned Petrovietnam with leading project development.

At the same time, the government will refine policy mechanisms to attract private sector participation, including options for the state to purchase or lease storage capacity under commercially balanced terms.

Petrovietnam has been instructed to urgently prepare and submit the project for approval, while coordinating with ministries and local authorities to expedite execution. The firm needs to engage foreign stakeholders to advance oil reserve agreements, supporting both economic growth targets of 10% or higher and broader national security objectives, Chinh added.

The Thanh Hoa People's Committee will oversee land clearance, with permission to apply emergency procedures typically reserved for urgent infrastructure projects.

The Ministry of Finance has been tasked with finalizing regulations guiding the Law on National Reserves, addressing technical and operational issues such as inventory rotation and cost norms. Meanwhile, the Ministry of Industry and Trade will continue to study the development of additional storage facilities in Dung Quat (central province of Quang Ngai), Long Son (Ho Chi Minh City), and other areas.

PM Chinh emphasized the need to ensure safety, efficiency, and resilience, including preparedness for extreme scenarios, during the project implementation.

At present, Vietnam does not have a dedicated national fuel reserve. Instead, strategic inventories are stored at facilities operated by major fuel distributors under commercial contracts, with the state paying storage fees based on regulated norms. This arrangement provides only a thin buffer, equivalent to roughly 7-10 days of consumption.

Under Decision 861/2023/QD-TTg, which outlines Vietnam’s fuel and gas storage infrastructure strategy, authorities aim to significantly expand reserve capacity over the coming years. The plan targets total crude oil and refined product reserves equivalent to 75-80 days of net imports, rising to 90 days by 2030.