PetroVietnam will sign an EPC contract with Technip on May 17 to develop the Dung Quat Oil Refinery project if the prime minister gives the final say of approval, a PetroVietnam official said on May 10.
The national oil and gas corporation is finalizing details of the contract for submission to the prime minister this week, and the engineering procurement-construction (EPC) contract will be inked upon approval.
The source, who asked not to be named, said the contract value is US$2.5 billion. Earlier, the total cost of the project was put at US$1.3 billion when PetroVietnam signed a joint venture contract with Russia’s Zarubezneft, but the figure was revised up to US$1.5 billion a few months ago when PetroVietnam decided to add certain facilities to the oil refinery complex.
Another top official on PetroVietnam’s board of directors said the steering committee for key state projects at a meeting on Monday also gave the go ahead signal to the project invested by PetroVietnam. The project had been scheduled to go before the on-going National Assembly session again for screening. Therefore, after the EPC contract is signed, the project would still be scrutinized by the lawmaking body, and the contract is only valid if National Assembly approval is forthcoming.
The country’s first oil refinery project in Quang Ngai Province in Central Vietnam has been facing several tumbling blocks as officials and experts have been at odds over its cost-effectiveness.
Eight-years ago, National Assembly deputies screened the capital-intensive project and gave a thumb-ups. Such a lengthy period ever since, however, has seen only the ground levelled for the refinery, plus a number of support facilities.
The official report on the project to be delivered at the session this time is explicitly meant to brief lawmakers on the progress and the reasons behind the foot-dragging process. However, the main aim is to seek their opinions over whether the project should be continued or not, said PetroVietnam.