PetroVietnam seeks $7 bln in European investment

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Vietnam state oil and gas group PetroVietnam seeks investment of US$7-$7.5 billion from European firms to help fund eight major projects, including the country's first liquefied natural gas (LNG) terminal, a senior executive said.

"We will receive the government's loan guarantee for the power projects, and the foreign investors will have the government's support in converting local currency to foreign exchange," Nguyen Tien Dung, PetroVietnam vice president, said on Wednesday.

The Thi Vai LNG receiving terminal, Nam Con Son 2 gas pipeline, three thermal power plants and Phuoc An port are among the projects offered, the Hanoi-based group said in a separate statement.

PetroVietnam has been calling for investment in the past few years to fund several dozen projects including expansion of its existing refinery and plans to build a third, nine power plants and a series of upstream projects domestically and overseas.

Dung Quat, the nation's sole oil refinery, aims to raise its capacity to as much as 12 million tons a year, or 240,000 barrels per day, from an initial plan of 10 million tons, Dung said.

"We have been seeking strategic partners who would buy the stakes in the plant and ensure its crude oil supply after the expansion," he said.

Investors from Japan, Singapore, Russia, Venezuela, Korea have shown interest, he said.

State media have reported that Japan's JX Nippon Oil and Energy Corp and Venezuela's state oil company PDVSA could sign a memorandum of understanding with PetroVietnam to join the expansion plan. The head of the refinery said the companies have shown interest but there have been no negotiations with them.

The 135,000 bpd plant will mix 30 percent of imported crude oil with domestically pumped oil, instead of 10 percent at present, as output declines from the domestic fields that supply the facility, Dung said.

Output from the Bach Ho (White Tiger) field, which provides most of the sweet crude to the plant, has fallen to 5-6 million tons a year from a peak of more than 10 million tons.

PetroVietnam has also been pushing up the construction date of a second refinery, Nghi Son, Dung said.

Investors in the plant aim to sign the engineering, procurement and construction contract with the contractor in December and start construction shortly after that, he said.

Idemitsu Kosan Co, Japan's third-largest refiner, has said it is delaying a final investment decision on the Nghi Son refinery and does not expect to start operations until 2016, instead of the earlier target date of 2014.

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