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Idemitsu Kosan Co. of Japan has finally reached an investment decision with its fellow investors Mitsui Chemicals Inc., Kuwait Petroleum International, and PetroVietnam., and will now continue with its plans to build a $9 billion oil refinery in Vietnam.
Construction of the 200,000 barrel a day Nghi Son refinery and chemical plant, located just south of Hanoi, will begin next month with an initial date of production expected sometime in 2017. An engineering, procurement, and construction contract has already been appointed to a consortium of Chiyoda Corp., JGC Corp., Technip SA, GS Engineering & Construction Corp., and SK Engineering & Construction Co.
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The refinery will be Vietnam’s second after the Dung Quat refinery began commercial production in 2009.
The project will mostly be funded by pre-arranged financing agreements, including $2.3 billion from the Japan Bank for International Cooperation, and the Export-Import Bank of Korea, and $2.7 billion in various loans from several commercial banks. The remaining $4 billion will be supplied by Idemitsu and its partners.
In January, Bloomberg stated that Idemitsu and Kuwait Petroleum International Ltd. each have a 35.1 percent stake in the Nghi Son project, while Vietnam Oil & Gas Group holds 25.1 percent. Mitsui Chemicals Inc. has a 4.7 percent interest.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com