Case study: Refineries in Vietnam

Published: 2016.02.03

Vietnam has set ambitious fuel quality standards in an effort to curb worsening air pollution from vehicle emissions (Clean Air Asia; Vietnam Environmental Administration, 2013). At the same time, the country aims to reduce its heavy reliance on imports of refined petroleum products, which have grown by 9% annually over the past 8 years (Vung Ro Petroleum Ltd., 2013; PetroVietnam, 2010). Vietnam has developed a dual-purpose solution to effectively address both issues: by upgrading its single existing refinery and constructing several new ones with advanced technology, the country will produce clean fuel domestically.

Vietnam’s first and only refinery, the Dung Quầt refinery, has been in production since 2009 and produces diesel and gasoline that meet Euro 2 standards (PetroVietnam, 2010). It is currently undergoing a major upgrade and capacity expansion and is expected to begin production of Euro 5 diesel and gasoline in 2016 (PetroVietnam, 2010; Hydrocarbon Processing, 2013a; Oil & Gas Refining & Petrochemicals, 2013). At the same time, several new refineries are being constructed. The Vung Ro refinery (completion date: 2018) will produce Euro 5 fuel (VRP, 2013), while the Nghi Sơn refinery (completion date: 2016; Thanhien News, 2013; Platts, 2013a) and the Long Son refinery (completion date: 2018; Saigon Times, 2013; PetroVietnam, 2010) will meet Euro 4 standards.

These refinery construction and upgrade projects will allow Vietnam to meet its roadmap for low sulfur fuel: implementing the Euro 4 standard in 2016 and Euro 5 in 2021. If these projects are successful and completed as scheduled, Vietnam will more than meet domestic demand for low sulfur fuel through domestic production.