Thailand's PTT Considers $28.7 Billion Refinery in Vietnam

Thailand's top energy firm PTT is considering building a $28.7 billion oil refinery in central Vietnam, a company official said on Monday, in what would be a record foreign investment in the country.

A report in Vietnam's state-run Tuoi Tre newspaper said the refinery would have a capacity of 660,000 barrels per day (bpd), or almost five times the current capacity of the Dung Quat oil refinery -- Vietnam's sole such facility.

"The Vietnam government has hired PTT's subsidiary to study the possibility of a refinery project in Vietnam. PTT has not yet decided whether they will invest in the project ... and it should take a long time for PTT to make a commitment," PTT's chief financial officer, Surong Bulakul, told Reuters.

PTT has reported its pre-feasibility study of the proposed refinery to the Binh Dinh central provincial government, the newspaper said, quoting the management board of the economic zone where the plant would be located.

The proposed facility could be built in Nhon Hoi, about 1,000 km (620 miles) south of Hanoi, according to the website of the Binh Dinh economic zone management board.

Provincial officials have requested PTT to prove its financial capacity and swiftly complete a feasibility study to give to the two governments. Nhon Hoi has a port with a capacity of 30,000 deadweight tons, which will be further expanded by 2020, the economic zone management board said.

Construction of the Nhon Hoi refinery could begin in 2016 and the plant is expected to start operating in 2019, pending approval by the Vietnamese government, the newspaper added.

Vietnam's sole oil refinery, Dung Quat, currently has a capacity of 135,000-bpd but it is expected to be nearly doubled to 240,000 bpd by 2017.

The Southeast Asian country has been planning at least four other refineries to raise its refining capacity to 25-30 million tons by 2020 as stated by the government.

The biggest refinery project so far in Vietnam is the 200,000 bpd Nghi Son plant in the central province of Thanh Hoa, the country's second plant, with total investment estimated at $7.5 billion.

Investors of the Nghi Son oil refinery aim to sign the engineering, procurement and construction contract with the contractor in December and strive to start construction shortly after that.

Nghi Son refinery is a venture between Petrovietnam, Kuwait Petroleum International, Japan's Idemitsu Kosan and Mitsui Chemicals.