Dung Quat Refinery
Encyclopedia
Dung Quat refinery is an oil refinery
in Quang Ngai Province
, Vietnam
. It is the first oil refinery in Vietnam.
, just 100 kilometres (62.1 mi) away from the offshore oil fields. In 1988, the clearance of the construction site from unexploded wartime ordnance was started. However, in 1991 the refinery project was shelved. In the early 1990s, Total SA expressed interest to the project. At the same time the Vietnamese government suggested to move the site to Van Phong bay, north of Nha Trang
, and later further north to Dung Quat. Followed this, in 1995 Total SA pulled out, claiming that the new site made no economic sense. Total was replaced with a consortium of foreign investors, including LG Group
and Petronas
, but also this consortium withdraw two years later.
In 1998, establishment of VietRoss, a joint venture of Vietnam and Russia, was decided. The intergovernmental agreement on the construction and operation of the refinery was signed on 25 August 1998. The Front End Engineering Design (FEED) Contract was signed between Petrovietnam
, Zarubezhneft
and Foster Wheeler Energy
. The Dung Quat Refinery was originally scheduled to start work in 2000, but the process was several times delayed. On 25 December 2002, the intergovernmental agreement between Vietnam and Russia was terminated, and the project continued as a solo project of Petrovietnam.
On 24 October 2003, the project management consultancy services contract was signed with Stone & Webster
, and on 27 February 2004 the contract for front end engineering design (FEED) development was signed with Technip
. The construction started on 28 November 2005. The refinery was inaugurated by the Vietnamese Prime Minister
Nguyễn Tấn Dũng on 22 February 2009. In the same year, industrial gross output
in Quang Ngai Province increased by 144.7% and the share of industry in the province's GDP surged from 36.2% in 2008 to 46.3% in 2009.
On 16 August 2009, refinery's operations were suspended due to a "technical repair" in the residue fluid catalytic cracking unit. The unit is expected to be repaired by 9–10 September 2009.
Main contractors of the refinery were Technip
, JGC Corporation
, and Técnicas Reunidas. The refinery cost US$3 billion, up from $2.5 billion previously and more than double an original cost estimate of about $1.4 billion in 1994. It may need another $1 billion to build a desulphurising unit targeted for 2013.
for supplies of similar quality to use exclusively until 2011.
, Essar Group
and SK Energy
to upgrade and sell part of the refinery.
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
in Quang Ngai Province
Quang Ngai Province
Quảng Ngãi is a province in the South Central Coast region of Vietnam, on the coast of South China Sea. It is located 883 km south of Hanoi and 838 km north of Ho Chi Minh City.-History:...
, Vietnam
Vietnam
Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...
. It is the first oil refinery in Vietnam.
History
The refinery project started already in 1980s. The refinery was planned to be construct near the port of Vung TauVung Tàu
Vũng Tàu is a city in southern Vietnam. Its population in 2005 was 240,000. The city area is including 13 urban wards and one village. It is the capital of Ba Ria-Vung Tau province, and is the crude oil extraction center of Vietnam. It is also known as one of the most beautiful cities of tourism...
, just 100 kilometres (62.1 mi) away from the offshore oil fields. In 1988, the clearance of the construction site from unexploded wartime ordnance was started. However, in 1991 the refinery project was shelved. In the early 1990s, Total SA expressed interest to the project. At the same time the Vietnamese government suggested to move the site to Van Phong bay, north of Nha Trang
Nha Trang
Nha Trang is a coastal city and capital of Khanh Hoa province, on the South Central Coast of Vietnam. It is bounded on the North by Ninh Hoà district, on the East by the South China Sea, on the South by Cam Ranh town and on the West by Diên Khánh district...
, and later further north to Dung Quat. Followed this, in 1995 Total SA pulled out, claiming that the new site made no economic sense. Total was replaced with a consortium of foreign investors, including LG Group
LG Group
LG Corp. is the second-largest South Korean conglomerate company following Samsung, and it is headquartered in the LG Twin Towers in Yeouido-dong, Yeongdeungpo-gu, Seoul. LG produces electronics, chemicals, and telecommunications products and operates subsidiaries like LG Electronics, LG Display,...
and Petronas
Petronas
PETRONAS, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company that was founded on August 17, 1974. Wholly owned by the Government of Malaysia, the corporation is vested with the entire oil and gas resources in Malaysia and is entrusted with the responsibility of developing and...
, but also this consortium withdraw two years later.
In 1998, establishment of VietRoss, a joint venture of Vietnam and Russia, was decided. The intergovernmental agreement on the construction and operation of the refinery was signed on 25 August 1998. The Front End Engineering Design (FEED) Contract was signed between Petrovietnam
Petrovietnam
PetroVietnam is the trading name of Vietnam Oil and Gas Group . PetroVietnam has developed rapidly since it was established in 1977, and its activities, through its various companies and wholly owned subsidiaries, now cover all the operations from oil and gas exploration and production to...
, Zarubezhneft
Zarubezhneft
JSC Zarubezhneft is a Russian state-controlled oil company based in Moscow that specializes in exploration, development and operation of oil and gas fields outside Russian territory....
and Foster Wheeler Energy
Foster Wheeler Corporation
Foster Wheeler is a global conglomerate incorporated in Switzerland and with its principal executive offices in New Jersey. It is focused on Engineering, Procurement, and Construction and on power...
. The Dung Quat Refinery was originally scheduled to start work in 2000, but the process was several times delayed. On 25 December 2002, the intergovernmental agreement between Vietnam and Russia was terminated, and the project continued as a solo project of Petrovietnam.
On 24 October 2003, the project management consultancy services contract was signed with Stone & Webster
Stone & Webster
Stone & Webster is an American engineering services company based in Stoughton, Massachusetts. Stone & Webster was founded as an electrical testing lab and consulting firm by electrical engineers Charles Stone and Edwin Webster in 1889. It was acquired by The Shaw Group in 2000. The company...
, and on 27 February 2004 the contract for front end engineering design (FEED) development was signed with Technip
Technip
Technip is a provider of project management, engineering, and construction services for the oil and gas industry, headquartered in Paris, France....
. The construction started on 28 November 2005. The refinery was inaugurated by the Vietnamese Prime Minister
Prime Minister of Vietnam
-Office:The Prime Minister of the Socialist Republic of Vietnam is the head of the executive branch of the Vietnamese government. The Prime Minister presides over the Vietnamese cabinet, and is responsible for appointing and supervising ministers...
Nguyễn Tấn Dũng on 22 February 2009. In the same year, industrial gross output
Gross Output
Gross output is an economic concept used in national accounts such as the United Nations System of National Accounts and the US National Income and Product Accounts...
in Quang Ngai Province increased by 144.7% and the share of industry in the province's GDP surged from 36.2% in 2008 to 46.3% in 2009.
On 16 August 2009, refinery's operations were suspended due to a "technical repair" in the residue fluid catalytic cracking unit. The unit is expected to be repaired by 9–10 September 2009.
Technical features
Dung Quat refinery has a designed capacity of 6.5 million tons of crude oil annually, or 140 koilbbl/d. The capacity would be expanded to 10 million tons per year by 2013–2014. In addition to fuels, the refinery will also produce petro-chemical products. The refinery complex area comprises:- Overall Refinery Process, Utility and Offsites Facilities: about 110 ha;
- Crude Tank Farm and Flare Area: about 42 ha;
- Product Tank Farm: about 36 ha;
- Seawater intake, Waste Water and Crude Oil Pipelines: about 4 ha;
- Interconnecting Pipelines, road and right of Way: about 40 ha;
- Product Harbor Service Area: about 135 ha.
Main contractors of the refinery were Technip
Technip
Technip is a provider of project management, engineering, and construction services for the oil and gas industry, headquartered in Paris, France....
, JGC Corporation
JGC Corporation
JGC Corporation is a global engineering company headquartered in Yokohama, Japan. It is listed at the Tokyo Stock Exchange. The company was founded on 25 October 1928. In 1976, it changed its original name from Japan Gasoline Co. to JGC Corporation...
, and Técnicas Reunidas. The refinery cost US$3 billion, up from $2.5 billion previously and more than double an original cost estimate of about $1.4 billion in 1994. It may need another $1 billion to build a desulphurising unit targeted for 2013.
Source of supply
The refinery is outfitted to process oil from Bạch Hổ oil field, which is expected to run dry before 2020. Petrovietnam has a preliminary agreement with BPBP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...
for supplies of similar quality to use exclusively until 2011.
Ownership
The refinery is owned and operated by Petrovietnam. Petrovietnam negotiates with foreign oil companies including Royal Dutch ShellRoyal Dutch Shell
Royal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
, Essar Group
Essar Group
The Essar Group is a multinational conglomerate corporation in the sectors of Steel, Energy, Power, Communications, Shipping Ports & Logistics as well as Construction head quartered at Mumbai, India...
and SK Energy
SK Group
SK Group is the third largest conglomerate in South Korea. The SK Group is composed of 92 subsidiary and affiliate companies that share the SK brand and culture....
to upgrade and sell part of the refinery.
