The decision was made as the investor did not implement the project according to plan, stated the announcement.
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It includes the construction of Bai Goc Port to serve the project as well as handle general cargo and containers, according to the project's scope of work. The area of the project is 538 hectares, 404ha of which is reserved for the plant and 134ha for the port. It is also going to use 500-1,300ha of water surface.
With a total investment of US$3.2 billion, Vung Ro Petroleum & Oil Refinery was designed to have a capacity of 8 million tons of crude oil per year.
Under the original plan, the first phase of the construction process would be completed and start operation in 2016. However, 10 years after being approved, the construction has not been started.
One of the reasons leading to the delay is the difficult site clearance process, combined with the oil and the Russian economic crisis in 2015-2016, leading to the weakening of the Russian ruble, which increased implementation costs.
The project would have played an important role in facilitating the Vietnamese refinery and petrochemical industry, with a purpose to serve domestic demand and export alike, stated the project's official website.
Meanwhile, Dung Quat Refinery, the first-ever oil refinery in Vietnam, processes about 6.5 million tons of crude oil per year, meeting only 30% of the domestic demand for petroleum products, according to the Ministry of Industry and Trade.
The refinery has supplied over 50 million tons of petroleum products to the market after 9 years of operation, reaching an accumulated revenue of VND862.5 trillion (US$38 billion).
Vietnam's second oil refinery, Nghi Son Refinery and Petrochemical, is expected to begin producing commercial products next month.
