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Sunday February 22, 2009

Vietnam inaugurates first oil refinery


HANOI, Vietnam (AP): Vietnam will open its first oil refinery on Sunday, a $3 billion project that will meet one-third of the nation's petroleum needs and ease its dependence on imported fuel.

The opening of the Dung Quat refinery, which took four years to build, is a milestone for Vietnam, an oil-exporting nation that, until now, did not have the capacity to process its own fuel.

Last year, Vietnam produced nearly 16 million U.S. tons (15 million metric tons) of crude, almost all of which was for export, while it imported nearly 14 million U.S. tons (13 million metric tons).

The new plant in central Quang Ngai province will reach its full capacity of 7.1 million U.S. tons (6.5 million metric tons) of crude oil per year in August, according to oil and gas monopoly PetroVietnam.

The location is far from the oil fields off the southern coast and the main consumer center of Ho Chi Minh City. Quang Ngai province is about 560 miles (900 kilometers) south of Hanoi.

The refinery was built by a consortium led by the French company Technip S.A. Its opening comes after years of delays.

In the mid-1990s, foreign firms that had expressed interest in building the refinery withdrew because Vietnam's communist government insisted on locating it in Dung Quat province, hoping to boost the economy of the poor central region.

In the late 1990s and early 2000s, PetroVietnam teamed up with a Russian firm, but the project did not go through because of complex tendering procedures and changes in its design.

Dinh La Thang, chairman of the board of PetroVietnam, told state media this week his company will invest in two more refineries over the next six years, one in the north and another in the south.

Each would add a processing capacity of 11 U.S. tons (10 million metric tons) of crude oil a year, and the government has set a target of self-sufficiency in fuel by 2015 for the country of 86 million people, he added.

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