Vietnam has sold its first cargo of domestically produced jet fuel, marking the end of its total reliance on imports.
State-owned oil firm PetroVietnam sold the 35,000 bl cargo produced by the 145,000 b/d Dung Quat refinery to BP Singapore. Commercial operations at Dung Quat, Vietnam's first large-scale refinery, officially started in February last year but jet fuel sales have only begun after a lengthy certification process involving UK and US industry bodies and oil companies.
Dung Quat is able to produce 1.58mn-2.36mn bl of jet fuel a year but output by the end of this year is expected to be around 946,000 bl. National carrier Vietnam Airlines, through its trading arm Vinapco, is thought to be looking to buy jet fuel from Dung Quat.
Vinapco, Vietnam's largest jet fuel supplier and whose market monopoly only ended in April, is thought to have imported 3.94mn-4.73mn bl last year. Vinapco bought jet fuel from within Asia, including from Shell and Chinese state-owned refiner Sinopec.
But while Dung Quat's start-up has cut the country's reliance on oil product imports, at least one product is likely to experience an opposite effect. Jet fuel and kerosine production compete for the same resources, with the latter having a much lower profit margin. Vietnam is therefore expected to slash kerosine output in favour of jet fuel and import it instead. Demand for kerosine, used mainly for lighting, is declining sharply in rapidly urbanising Vietnam. PetroVietnam last sought to import kerosine in July, following a 10-month absence.
Send comments to feedback@argusmedia.com
nhw/rjd 2.1
If you would like to review other ArgusMedia.com content options, request more information about Argus' energy news, data and analysis services.
Copyright © 2010 Argus Media Ltd - www.ArgusMedia.com - All rights reserved.

