Vietnam Nghi Son refinery likely to shut in Feb: Update

Adds new information in para 6 and update from NSRP source in para 1, 2

Vietnamese refinery operator Nghi Son Refinery and Petrochemical (NSRP) will likely shut its 200,000 b/d refinery between the middle of February and the end of March on financial issues, and is looking to secure financial assistance for its operations, said a source familiar with refinery operations.

The refinery is operating at reduced run rates of around 80pc, and it is still unclear if the refinery will be able to restart operations after March, said the source.

The reduced production capacity had possibly prompted Vietnamese state-controlled buyers Petrolimex and PVOil to seek prompt and February-loading cargoes of gasoil and gasoline this month, said market participants.

Petrolimex and PVOil had emerged with spot tenders to seek prompt gasoil cargoes, with Petrolimex seeking a prompt-loading Medium Range cargo of 500ppm (0.05pc) sulphur gasoil for loading at the end of January, along with another same-sized cargo of ultra-low sulphur diesel for loading in February. PVOil had also sought 30,000m³ (189,000 bl) of 500ppm sulphur gasoil, likely for delivery in February. The two firms had also emerged to buy about 147,000 bl of gasoline for loading between the end of January and February.

The prompt-loading nature of the cargoes came as a surprise, particularly with Petrolimex seeking 500ppm sulphur gasoil for loading during 18-22 January in a spot tender that closed on 14 January. This could indicate a pressing shortage of diesel within the country, a key consumer of the 500ppm sulphur gasoil grade.

Its downstream 370,000 t/yr polypropylene (PP) plant will be shut from 13 February until March because of expected feedstock shortages. Southeast Asian PP buyers and traders are expected to receive limited export offers from the producer in February.

Paraxylene and benzene offtakers have so far not been notified of any changes in loading and delivery schedules.

Nghi Son's aromatics unit was unexpectedly shut last October because of minor technical issues. The entire refinery also suffered a shutdown in February 2021 following a power outage.

Nghi Son is a joint venture between Kuwait's state-owned KPC, state-owned PetroVietnam and Japanese firms Idemitsu and Mitsui Chemicals with KPC supplying the crude. The refinery is expected to produce 75,000 b/d of gasoil and about 25,000 b/d of gasoline, according to Nghi Son.

By Sarah Giam, Cara Wong, Aldric Chew, Brian Leonal, Deon Ngee and Yee Ying Ang