Binh Son Refining and Petrochemical Co Ltd inks crude oil supply deals with Socar Trading and Glencore Singapore. (Source: VNA) Hanoi (VNA) - Binh Son Refining and Petrochemical Co. Ltd. (BSR) hassigned crude oil supply agreements with two trading companies – GlencoreSingapore and Socar Trading SA – to supply the Dung Quat refinery for the2018-25 period.
Under the initial agreements, Glencore Singapore will supplytwo million barrels of crude oil, comprised of 57 oil varieties, to therefinery each month between 2017 and 2021. It will increase the supply to threemillion barrels per month after the refinery completes expansion and upgradingin 2021.
Though the agreement is valid until 2025, the two sides willendeavor to maintain it until 2040, the officials said.
Meanwhile, Socar Trading SA will provide three millionbarrels of Azeri Light crude and two million barrels of 56 other types of crudeeach month between 2018 and 2021.
Glencore Singapore and Socar Trading SA have supplied theDung Quat refinery since 2010. BSR has imported about 10.6 million barrels ofAzeri crude from Socar, while Glencore is on the list of BSR’s crude oilsuppliers for 2016-18.
Cooperation with the world’s leading crude oil suppliers ispart of BSR’s strategy to ensure a long-term supply of crude oil for the DungQuat refinery.
“The agreement signing today will be one among hundreds ofsimilar acts we will conduct in the future to offset the declining domesticsupply,” BSR’s chairman Nguyen Hoai Giang told reporters before the signingceremony.
In the initial stage, the Dung Quat refinery is designed toprocess domestic light sweet crude, mostly from the Bach Ho (White Tiger) oilfield in Cuu Long basin, but the domestic supply is projected to decline in thefuture.
Giang said a fairly accurate forecast shows that in the nextfour to five years, the domestic oil supply will be insufficient for DungQuat’s production and the company is seeking other sources of supplies.
Located in the central province of Quang Ngai, the Dung Quatrefinery’s capacity is expected to increase from its current 6.5 million tonnesper year to 8-9 million tonnes per year in 2021 after upgrading and expansion.
Giang said the upgrade will increase the plant’s processingcapacity from its current 67 to hundreds of types of crude from globalsuppliers.
“This [upgrade and expansion] will improve the factory’soverall efficiency, reduce supply risk when domestic supply is exhausted andraise environmental standards,” Giang said.
Quek Chin Thean, Glencore Singapore’s managing director,said Dung Quat’s technology is “pretty much in place and the key issue here isthe good supply contracts and supply of good crude” for its optimal efficiencyand profitability.
BSR reported positive business results in the first 11months with 71.9 trillion VND (3.15 billion USD) in revenues, exceeding itsplans by 15.8 percent. It ranked 16th in the Vietnam Report’s list of the top500 most profitable companies.
It paid about 9.06 trillion VND to the State budget fromJanuary to November.-VNA
VNA
