* Facility would be a record foreign investment for Vietnam
* To have a capacity nearly five times existing refinery
* Planned to be built in Nhon Hoi economic zone
* Construction of the refinery could begin in 2016
(Adds analyst, PTT comments, details)
HANOI/BANGKOK, Nov 26 Thailand's top energy
firm, PTT Pcl, is considering plans to build a
$28.7-billion oil refinery in central Vietnam, company officials
said on Monday, in what would be a record foreign investment 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 only existing
facility, the Dung Quat refinery.
If the project goes ahead, it would rank among the five
biggest refineries in the Asia-Pacific region and leave Vietnam
with a surplus of refined oil products, said Alex Yap, an
analyst at FACTS Global Energy.
"There are already two other projects in the pipeline. To
have a project at this size and this cost, it's very ambitious,"
Vietnam's domestic demand is only about 400,000 bpd, a third
of which is met by its existing refinery, he added.
"Thailand is a net exporter, while Myanmar wants to build a
refinery. Yes, they can target the export market, but unless you
have a whole market to absorb your products, it will be very
competitive," Yap said.
PTT Chief Executive Pailin Chuchottaworn said the project
depended on approval from Vietnam's central government and if
the company decided to invest, it would import crude to feed the
refinery and petrochemical plants, whose output would be sold
on the domestic market.
"The project belongs to Binh Dinh province and needs
approval from the central government. After that, PTT will
decide if we want to invest," Pailin said, adding that it was
too early to decide on funding plans.
LONG TIME SEEN FOR COMMITMENT
The government of Vietnam has hired PTT's subsidiary in the
country to study the possibility of the refinery project, which
has growth potential.
"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," Chief Financial Officer Surong Bulakul told
Such an investment would provide a boost for Vietnam, whose
government estimates the economy expanded 4.73 percent in the
first nine months of this year, down from 5.77 percent in the
corresponding 2011 period.
State-controlled PTT said in July its investments in Vietnam
would include a refinery and petrochemical complex, as part of
its strategy to expand into Southeast Asia.
PTT has reported its pre-feasibility study of the proposed
refinery to the government of southern Binh Dinh province, the
newspaper said, quoting the management board of the economic
zone where the plant is to located.
The proposed facility could be built in Nhon Hoi, about
1,000 km (620 miles) south of Hanoi, according to the board's
Provincial officials have asked PTT to prove its financial
capacity and swiftly complete a feasibility study for the two
governments. Nhon Hoi has a port with a capacity of 30,000
deadweight tonnes set to be expanded by 2020, the board said.
Construction of the Nhon Hoi refinery could begin in 2016
and the plant is expected to start operating in 2019, pending
government approval, the newspaper added.
Vietnam's sole oil refinery, Dung Quat, currently has a
capacity of 135,000 bpd, which is expected to nearly double 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 million to
30 million tonnes by 2020.
Vietnam's biggest refinery project so far is its second
plant, the 200,000 bpd Nghi Son refinery in the central province
of Thanh Hoa, with total estimated investment of $7.5 billion.
Investors in Nghi Son aim to sign the engineering,
procurement and construction contract with the contractor in
December and start construction soon after.
Nghi Son is a venture among Petrovietnam, Kuwait Petroleum
International, Japan's Idemitsu Kosan Co Ltd and Mitsui
Elsewhere, Malaysia's Petronas also plans to build a
$20-billion refinery with a capacity of 300,000 bpd in Johor.
(Reporting by Ngo Thi Ngoc Chau, Pisit Changplayngam in BANGKOK
and Florence Tan in SINGAPORE; Writing by Khettiya Jittapong;
Editing by Clarence Fernandez)