Thailand’s State-owned oil and gas giant PTT has only asked authorities to delay its Victory Nhon Hoi Oil Refinery and Petrochemical Complex project in south-central Binh Dinh province, not withdraw from the project, a local official has confirmed.

In response to VET enquiries on July 9, Mr. Nguyen Ngoc Toan, Deputy Head of the Nhon Hoi Economic Zone, the site of the project, said that “the Thai group has not yet withdrawn from the project as some foreign and local media have reported.”

“PTT has only asked for the project’s implementation to be delayed,” Mr. Toan told VET. “The province will make a decision with PTT before the end of the month.”

Foreign and local media reported last week that PTT had withdrawn from the $20 billion oil refinery and petrochemical complex project due to difficulties caused by falling oil price.

Mr. Toan, however, said that given the uncertainty in global crude oil markets triggered by a falling crude oil price, “the investor said it would need time to reconsider the project’s size.”

The Victory Nhon Hoi project was initially estimated in 2012 to require investment of $28 billion and have a total annual capacity of 20 million tons when PTT began studying the investment.

The project is expected to contribute 40 per cent of the Binh Dinh’s GDP.

It was to break ground in 2016 and PTT has been cooperating with the world’s largest oil company, Saudi Aramco, with each contributing a 40 per cent stake, while the remaining 20 per cent was to come from a Vietnamese partner.

Asked if PTT was unable to complete the project, Mr. Toan said that “the province would certainly look for another investor to continue the project.”

Binh Dinh province has provided a number of favorable conditions to PTT, including land clearance of more than 1,400 ha of its 2,000 ha.

It also proposed the government offer special incentives to turn Nhon Hoi Economic Zone into a national central economic region.

If the project is implemented it would also benefit from corporate income tax and property tax preferences well as reductions on import taxes on crude oil and equipment, machinery, and materials that cannot be produced domestically.

Once completed its products will also be sold on the local market.

PTT initially proposed having its own seaport and has sought other special incentives.

Nothing has moved forward since 2012, however. The committed investment was subsequently cut to $22 billion and then $20 billion and Binh Dinh has yet to receive any licensing documents for the project.

Global crude oil prices continue to fall, which has put many global giants in the oil and gas field in difficulties, and PTT and Saudi Aramco are no exceptions.

Vietnam’s oil market has recently seen the withdrawal of major oil refinery companies due to recalculations on their investment decisions, including Qatar Petroleum International at the Long Son Oil Refinery project in southern Ba Ria Vung Tau province and Russia’s Gazprom Neft (GPN) at the Dung Quat Oil Refinery and Petrochemical Complex project in central Quang Ngai province.

Thailand's Outgrow Energy Consult (OEC) has also recently proposed conducting a survey and promoting licensing of a power plant in Binh Dinh province.

The province has also promised to create favorable conditions for the investor to push project progress.

VN Economic Times