JX to invest in Vietnam refinery projects: report

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JX Holdings Inc, Japan's biggest oil refiner, will take part in the construction and operation of two Vietnamese refinery projects estimated to be worth around $9 billion, the Nikkei business daily reported.

Joining the projects, led by Vietnamese state-run oil firm PetroVietnam, would mark JX's first overseas refinery venture and enable the firm, coping with a decline in Japanese oil demand, to tap new sources of revenue.

JX will participate in the $1.1 billion project to expand Vietnam's first refinery, the 140,000 barrels per day (bpd) Dung Quat plant, and the construction of the nation's third refinery, the $8 billion Long Son plant, the Nikkei said.

JX and PetroVietnam will set up a joint working team in the near future to launch detailed negotiations, the paper said.

JX Holdings spokesman Tatsuji Ota said it was not true as reported in the Nikkei that its chairman, Shinji Nishio, had told PetroVietnam Chairman Dinh La Thang the Japanese firm would participate in the two projects.

Thang was in Tokyo last week seeking Japanese investment in PetroVietnam's 28 planned projects in downstream oil, power plants, finance and real estate, which would be worth a total of $23.79 billion, and met with various Japanese firms.

PetroVietnam is asking Japanese investors to take up to a 71 percent stake in the Long Son refinery, and offering up to a 49 percent stake in the expansion of the Dung Quat refinery, according to PetroVietnam's projects summary.

The expanded Dung Quat refinery will start operations in 2016 with a capacity of about 170,000 barrels per day, while Long Son will begin operations in 2020 with a capacity of about 200,000 bpd, the Nikkei said.

Thang said last week in Tokyo that PetroVietnam will select partners by the year-end for the Long Son refinery.

He also said that work is likely to start on Vietnam's second refinery, the 200,000-bpd Nghi Son plant, around July 2011.

Partners for the second refinery include Kuwait Petroleum International and Japan's Idemitsu Kosan Co.,  each with a 35.1 percent stake.

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