Dung Quat Oil Refinery resumed operation in early July after a two-month shutdown for handling technical problems, but the refinery once again came to a halt on Wednesday.
Binh Son Oil Refinery and Petrochemical Co., operator of Dung Quat Oil Refinery, and the main contractor Technip decided to shut down the refinery from 2 p.m. on Wednesday so that Technip could clear up the unsolved problem.
Nguyen Hoai Giang, general director of Binh Son, told the Daily on the phone that the problem arose from thermal expansion joint on the CO exhaust line at the residue fluid continuous cracking (RFCC) workshop, one of the most important components of the refinery.
“Dung Quat Oil Refinery and Technip will join hands to fix the technical problem and all costs will be covered by Technip because the problem lies within the contractor’s warranty,” Giang stressed.
The duration of this suspension will be announced on Thursday after related parties work with the contractor. However, the contractor expected it would last one week.
Giang stated this was the same technical problem that had been fixed in the previous shutdown, from June 16 to July 6.
After troubleshooting, the refinery will have a test run before it is handed over to the project owner, Vietnam National Oil and Gas Group (PVN).
Dung Quat Oil Refinery supplies 33 percent of the fuel products in the local market. Therefore, the problem at the refinery will affect the local fuel supply to some extent.
However, the refinery and importers still have a certain amount of fuels in stock, plus an 18 percent decline in consumption demand in July, so experts forecast the problem would not greatly affect the domestic fuel market.
Still, importers will have to struggle with higher cost for transporting fuels from Singapore to Vietnam, which has picked up $4 per barrel.
Petrolimex, PV Oil and Saigon Petro have made plans to find alternative supply for Dung Quat Refinery Oil, said Vnexpress.
Tran Ngoc Nam, deputy general director of Petrolimex, said his firm would seek supply sources in Singapore, South Korea, China, Taiwan and the Middle East. According to the leader of the company with a 60 percent fuel market share, the sudden shutdown of Dung Quat Oil Refinery makes it difficult for enterprises in the context that global fuel prices are rising.
PV Oil plans to buy some 1.6 million tonnes from Dung Quat Oil Refinery this year. If the refinery halted operation in 3-4 weeks, PV Oil would have to find other sources to purchase 100,000-135,000 tonnes.
Similarly, leader of Saigon Petro stated his company intended to import fuels from South Korea, Malaysia and Indonesia.
As planned, Dung Quat Oil Refinery will produce around 6.9 million tonnes of fuels this year, in which nearly five million tonnes will be allocated to Petrolimex, Petec and PV Oil.