The Socialist Republic of Vietnam has seen an economic boom that in the last few years has outpaced even that of China. Oil is a major part of this, as Vietnam exports all of the crude oil and some of the natural gas it produces from its coastal resources. Now that oil is needed at home, and a whole new petrochemical industry is gradually being built to fuel Vietnam to even greater heights.
Vietnam has seen its fortunes change ever since the introduction of doi moi, an ‘open door’ market-oriented policy, in the mid-1980s. And like some doors, this policy swings both ways, allowing foreign investments in and opening up for strategic investments abroad.
“We are now open to the world market, and everyone can come to Vietnam to do business. The doi moi policy was, and is, a renewal process and now the economy is developing very fast, as much as 8% a year. This year the growth target is 8.5%,” says Truong Van Tuyen, Vice President in Petrovietnam.
Petrovietnam is a state-owned oil company, and is officially known as Vietnam Oil and Gas Corporation. The company has developed rapidly since it was established in 1975, and is vested with the entire oil and gas resources in Vietnam, as well as responsibility for development of these resources.
Building an industry
The oil industry is one of the key industries for Vietnam. Developed since the late 1960’s, it now makes a sizeable contribution to the national budget. What they don’t have, though, is a downstream industry.
“Vietnam is one of the countries in South Asia that export crude oil and gas. Our goal now is to develop a downstream capability, as we are dependent on imports for all petrochemical products. We are now building the very first petrochemical refinery for Vietnam, called Dzung Quat,” says Truong Van Tuyen, who is also managing director of the Dzung Quat refinery management board.
The refinery is situated in the central region of Vietnam, in the Quang Ngai Province. Currently, ground work on the refinery is coming to a close and engineering work and procurement is well underway. Construction should begin by the end of 2006, and the site is expected to become operational in the 1st quarter of 2009. The capacity for Dzung Quat will be 6.5 million tonnes per year, which will both be for domestic consumption and for exports.
Plans for a second refinery are already on the way, and the construction of a third refinery has just been given the go ahead by Prime Minister Nguyen Tan Dung.
Getting it right the first time
Petrovietnam has chosen high quality standards and proven partners when building the refinery.
“Now that we are open to the world economy, we need experienced people to assist us. As this is the first refinery, we are faced with many difficulties and many new experiences. From the beginning, we need companies like DNV for support and to manage the risks involved with the project,” says Nguyen Huu Tuyen, Vice President of Petrovietnam.
And there are many more projects in the pipeline for Petrovietnam; over the next 10 years as many as 15 power plants, using natural gas as feedstock, are planned as well as several pipeline projects.
“Petrovietnam is the owner of a number of large projects totalling approximately seven billion USD, so there are many positive opportunities opening up in Vietnam now,” says Nguyen Huu Tuyen.
As Vietnam’s economy continues to grow, DNV’s country manager Jeffrey Lim is busy hiring new people to meet the demand.
“We have been working with Petrovietnam and their subsidiaries on several projects since establishing an office here in 1995,” he says. “In addition to the independent certification authority services, DNV has provided services such as risk assessment, safety and risk management training, asset integrity management, welders certification and more. For the Dzung Quat refinery, DNV’s risk based verification methodology has been applied with success.”