HANOI, Jan 24 (Bloomberg): Vietnam’s largest oil refinery cut processing rates and may be forced to close next month after a cash squeeze led to a halt in crude imports from Kuwait, according to people with knowledge of the matter.
Nghi Son Refinery & Petrochemical LLC is seeking financial assistance from the Vietnamese government and the plant could be shut if the company is unable to secure funding, said two people familiar with the matter who asked to not be identified because the information is private.
The refinery is running at 80% of capacity, down from 105%, and crude imports were halted about a week ago, they said.
The refinery reduced run rates and the company is discussing solutions with relevant stakeholders, said a Nghi Son Refinery executive, who asked not to be named due to company policy.
It’s expected that operations will return to normal, they said.
Calls to officials at Vietnam’s Ministry of Trade and Industry went unanswered.
Vietnam has two refineries that produce the bulk of its fuel needs and a cut to processing is likely to result in a boost in product imports.
A slump in domestic fuel demand due to Covid-19 lockdowns and a volatile global crude market contributed to the cash crunch at Nghi Son Refinery, the people said.
Nghi Son Refinery started operations in 2018 and has the capacity to process 200,000 barrels of Kuwaiti crude a day, producing products such as diesel and gasoline.
It’s a joint venture between Kuwait Petroleum Corp., Idemitsu Kosan Co., Vietnam Oil and Gas Group and Mitsui Chemicals Inc. An email sent to Kuwait Petroleum wasn’t immediately answered.
The nation’s other refinery -- Dung Quat -- can process 148,000 barrels a day. - Bloomberg
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