Vietnam picks foreign constructor for refinery
HANOI - Vietnam has chosen a French-led consortium to build the country's first oil
refinery ahead of a visit by South Korea's prime minister who had planned to lobby for a Korean firm in
the $1.3 billion investment.
Prime Minister Lee Han-dong is scheduled to arrive late on Sunday in Ho Chi Minh City and visit
Vietnam's business centre on Monday before flying to Hanoi on Tuesday for talks with the country's top
leaders.
Lee's secretary said on April 1 in Seoul that the prime minister would urge Vietnam to select South
Korea's Samsung Engineering as the contractor for the refinery.
But the official Vietnam News Agency (VNA) said on Sunday the government has approved the tender
result and awarded the contract to build the Dung Quat refinery to the Technip/JGC/Tecnicas Reunidas
consortium, formed by France's Technip-Coflexip , Japan's JGC Corp and Spain's Technicas
Reunidas Corp.
Government officials and management at the French-led consortium couldn't be reached for comment on
Sunday.
VietRoss, a 50-50 joint venture between Vietnam's Petrovietnam and Russia's Zarubezhneft, will invest
$1.3 billion to build the Dung Quat refinery of which $700-$800 million will be for construction and
equipment.
French-led consortium the winner
Competing with the French-led consortium for the contract was a consortium formed by Samsung and
ABB Lummus Global , industry sources said.
Diplomats and industry experts said Zarubezhneft was known to favour the Samsung-ABB consortium
while Petrovietnam was believed to be in support of the French-led consortium.
South Korean prime minister's planned visit to Vietnam follows closely a tour there late last month by
Russian Prime Minister Mikhail Kasyanov.
Russia's ITAR-TASS news agency quoted Kasyanov as saying that he had discussed the oil refinery
tender with his counterpart Phan Van Khai.
Kasyanov also said had proposed setting up another Russia-Vietnam joint venture to sell products from
Dung Quat.
Dung Quat oil refinery will be built in the central province of Quang Ngai, about 900 km (560 miles) north
of Vietnam's main crude supplies.
The refinery had been due for completion by 2003, but Russia has said the opening would be delayed two
years due to the technical delays.
The refinery is expected to produce gasoline, kerosene, diesel, fuel oil, propylene and liquefied petroleum
gas and to have a processing capacity of 130,000 barrels per day.
Despite being a producer of crude oil, Vietnam has to import all of its oil products due to its lack of a
refinery. Last year it earned $3.18 billion from crude oil exports but spent $1.87 billion importing oil
products.
Reuters - April 07, 2002.
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