Vietnam News

Vietnam’s largest refinery begins shutting down for maintenance

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 Vietnam’s largest oil refinery has shut down some of its units, beginning a 55-day total shutdown for major maintenance, a company source said on Wednesday.

The 200,000-barrel-per-day Nghi Son Refinery and Petrochemical will be totally shutdown on Friday, said the source, who declined to be named as the person is not allowed to speak to media.

“We have hired five contractors for the maintenance work, mostly domestic ones,” the person said, declining to reveal the value of the contract.

The facility, which began commercial production in 2018, covers more than a third of Vietnam’s needs for refined fuels.

The Southeast Asian country, a regional manufacturing hub, has recently increased imports of refined products to compensate for the shortfall due to the maintenance, with imports in the first seven months of this year rising 12.7% from a year earlier.

The Ministry of Industry and Trade said on Wednesday it had told the country’s top petroleum importer Petrolimex (PLX.HM) to “actively import to ensure sufficient supplies, especially during the maintenance of Nghi Son refinery” to make sure there is no shortage in the local market.

Nghi Son is 35.1% owned by Japan’s Idemitsu Kosan Co (5019.T), 35.1% by Kuwait Petroleum, 25.1% by Vietnam’s state oil firm PetroVietnam and 4.7% by Mitsui Chemicals Inc (4183.T).

An official document signed by Kuwait’s oil minister and reviewed by Reuters last week showed the refinery could incur a $1 billion loss this year, due to price volatility, increasing interest payments for loans and the maintenance shutdown.

The ministry said it had told PetroVietnam to propose measures to address the difficulties faced by the refinery, “including financial restructure to ensure its efficient operations.”

By Khanh Vu – Reuters – August 23, 2023

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