Vietnam has picked France's Technip, Japanese engineering firm JGC Corp and Spain's oil engineer Tecnicas Reunidas for a $5 billion deal to build Nghi Son oil refinery, the country's largest, a state-run newspaper reported.

Petrovietnam Construction Corp, a subsidiary of state oil group Petrovietnam, will join the three foreign firms in the engineering, procurement and construction contract for the 200,000-bpd refinery, the Vietnam Economic Times newspaper quoted Petrovietnam Chairman Dinh La Thang as saying.

He said the selection of partners in the EPC contract would enable construction of the refinery, which has a total investment of $7 billion, to start in March.

Petrovietnam has been developing the Nghi Son refinery in the northern province of Thanh Hoa, 215 km (134 miles) south of Hanoi, in a venture with Kuwait Petroleum International, Japan's Idemitsu Kosan Co and Mitsui Chemicals.

Nghi Son's operation is scheduled in 2014, and together with Dung Quat oil refinery, the country's first refinery, the two will meet half of domestic oil product consumption, the newspaper reported, without giving any figures for consumption in 2014.

In early 2010 state media said output of the two refineries could meet 80% of domestic need.

Petrovietnam said on Tuesday it has also picked JGC Corp as adviser for a plan to raise Dung Quat refinery's capacity to 200,000 barrels per day from 130,000 bpd now, and the project is expected to be completed in 2016.

Following the successful test-run completion of Dung Quat refinery and the handover to its owner Petrovietnam in late May 2010, the state oil group now already runs the refinery at more than 100% of its capacity.