The Vietnam Oil & Gas Group, also known as PetroVietnam, plans to spend around US$1.2 billion to expand and upgrade the Dung Quat Oil Refinery so it can meet as much as half of the nation's fuel demands.
PetroVietnam plans to increase the annual capacity of Vietnam's first and only refinery to between 9.5-10 million tons, from the current six million tons, according to a report that was posted on the government's news website last Sunday.
The refinery meets around 30 percent of Vietnam's fuel demand at the moment, the report said.
When the plant expansion is completed, at the end of 2015, the ratio will increase to 40-50 percent.
The report also said the Binh Son Refinery & PetroChemical Co., which operates the plant, will try to shorten the upcoming maintenance period at the refinery this July by one or two weeks to ensure sufficient fuel for the market.
In order to prepare for the two-month shutdown, the plant is now operating at 105 percent of its intended capacity. At present, the plant produces around 18,000 tons of fuel per day.
Nguyen Hoai Giang, general director of Binh Son, was quoted by VnExpress as saying that Vietnamese importers will need to buy one million tons of fuel to offset the supply shortfall caused by the plant shutdown.
He said that South Korea's Jcon, Ubec and Deachang won the maintenance contract at the refinery. The contract is valued at about $25 million.