Vietnam’s Petrovietnam also confirmed it was negotiating with three firms to build a refinery at Dung Quat.

Despite being an oil and gas producing nation, Vietnam has no refineries of its own and imports all its domestic petroleum requirements.

An unidentified official from the foreign economic department of Phu Khanh’s people committee told Dow Jones that IBC planned to build a plant which could initially process up to 1 million metric tons per annum.

“IBC wants to build its plant as soon as in mid-2005, and the plant will be expanded to 3 million tons per year later. They like the Vung Ro location because it’s a large deep-water gulf, and is close to Vietnam’s future key oil production areas,” said the official.

The same source also revealed IBC plans to buy crude oil from PetroVietnam and import crude oil for the Vung Ro plant.

Vung Ro is in the central province of Phu Yen and is “several hundred kilometres” from the deepwater Phu Khanh Basin where PetroVietnam is inviting international firms to explore for oil and gas in nine blocks – Blocks 122 to 130.

Meanwhile, a Dow Jones report, citing the same official, indicated the Vietnamese government was still negotiating with France’s Technip-Coflexip, Japan’s JGC Corp and Spain’s Technicas Reunidas to build the Dung Quat refinery.

The refinery is projected to have a crude oil processing capacity of 130,000 barrels a day, or 6.5 million tons a year.

According to the insider, “Definitely we will build the Dung Quat refinery, and we hope to be able to sign the contracts in early 2005.”