Sunday, June, 23, 2024 04:57:59

Vietnam’s petroleum and natural gas company, Petrolimex recently made plans to halt its about $5 billion Nam Van Phong petrochemical project. The project, jointly developed by Japan’s petroleum and metals conglomerate, JXTG Holdings, has been put on the backburner for now so that the firm may deploy resources on executing other projects and cut excess company cost.

As per an official statement, Petrolimex suggested that its 200,000-barrels-per-day operations at Nam Van Phong Refinery and Petrochemical Complex should stop, as it costs the company between $4.4 billion-$4.8 billion.

Apparently, officials from the finance and investment ministries seem to agree with Petrolimex’s proposed idea, given the project’s lack of competitiveness, along with concerns about surplus supply and uncertainty over tax support from the Vietnam government.

However, the decision in regard to stopping operations at the project needs to be approved from the prime minister or the government, said the officials.

For the record, JXTG Holdings has reportedly acquired 8% stake in Petrolimex in 2016 and further signed a memorandum of understanding (MoU) to work on the Nam Van Phong Refinery and Petrochemical Complex in 2014, reportedly built by Petrolimex in 2011.

Incidentally, Petrolimex’s spokesperson seem to dodge questions regarding the decision, saying that queries being forwarded to top officials will soon be answered. The Ministry of Industry and Trade, which holds a majority stake in the company, also failed to comment on Petrolimex’s proposed decision.

However, JXTG spokesperson claims that the company was well aware of the proposed decision, though are waiting for a statement from Petrolimex. Meanwhile, the project will continue its current operations until the decision is made official, said the spokesperson.

As per sources, the two existing oil refineries in Vietnam are capable enough to meet up to 70% to 80% of the domestic demands while being operated at full capacity, while imported products undergo tax cuts from Vietnam’s numerous trade agreements imposed in the region.