PetroVietnam to import 640,000 tons of crude in first half 2011

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Vietnam Oil & Gas Group, the owner of the country's only refinery, will import 640,000 metric tons of crude in the first six months of 2011, a 60 percent increase on total overseas purchases this year.

The state-owned company, known as PetroVietnam, will buy one 80,000 ton cargo of Malaysian crude each month from BP Plc, Nguyen Hoai Giang, general director of Binh Son Refinery and PetroChemical Co., the company that runs the Dung Quat plant, said by telephone Wednesday. A total of 400,000 tons of crude was imported in 2010, Giang said.

BP signed an agreement with PetroVietnam in January 2009 to supply crude to Dung Quat, which has an annual capacity of 6.5 million tons. Commercial production at the plant started in February last year.

PetroVietnam will buy another two 80,000 ton spot cargoes during the first half of 2011, Giang said. Details have yet to be decided, he added.

Dung Quat will use less domestic crude from the aging Bach Ho field during the first half of 2011, Giang said. Imported crude will constitute 13 percent to 22 percent of the refinery's consumption.

"The reason for this is so that we can test different operation modes with the most efficient source of oil," Giang said. "Bach Ho oil is very expensive in the world market. So instead of using expensive oil to make fuel, we can use a cheaper source of crude."

Dung Quat will produce about 4.9 million tons of petroleum products in 2011, PetroVietnam said Nov. 9. It will temporarily halt production for two months for maintenance in 2011, probably in July and August.

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