Nghi Son Refinery and Petrochemical LLC
This summary covers investments by Idemitsu Kosan Co. Ltd. and Mitsui Chemicals, Inc. of Japan and Kuwait Petro Europe, BV of Kuwait in the Nghi Son Refinery and Petrochemical LLC (NSRP) in Vietnam. The investors have applied for MIGA guarantees of up to $1.5 billion during the project construction phase for a period of up to 5 years against the risks of war and civil disturbance, and breach of contract.
The project consists of the construction and operation of a greenfield refinery and petrochemical complex in the Nghi Son Economic Zone located approximately 200 kilometers south of Hanoi. The project will have a crude processing capacity of 200,000 barrels per day and will produce gasoline, diesel, jet fuel, kerosene, and other fuels for the domestic marketplace. Petrochemicals products such as benzene, para-xylene and polypropylene (about 15 percent of revenues) will be manufactured for both export and domestic consumption. Historically, Vietnam has imported nearly all of its refined fuel products, transportation fuels, and petrochemicals.
This project is the first private sector refinery and petrochemical complex in Vietnam and would be the largest foreign direct investment in the country to date.
Key development impacts from the project are expected to include foreign exchange savings for the nation; the creation of direct jobs and training opportunities in the factory; indirect employment and small and medium enterprise generation in downstream sectors; and knowledge transfer from foreign firms. In addition, the project will contribute to creating a domestic, reliable, and efficient supply of refined products and petrochemicals to meet the country’s growing energy demand. The project will also have a positive demonstration effect to attract foreign investors in the petrochemical sector in Vietnam, and to boost the country’s private sector development in general.
The project is aligned with MIGA’s commitment to support more investments in complex deals, South-South investments, and investments in countries eligible for concessional lending from the International Development Association.
The World Bank’s current Country Partnership Strategy for Vietnam notes a need to strengthen the country’s economic competitiveness through private sector investment. The signaling effect of this project will help achieve that objective.