The Prime Minister surveyed the proposed location for the construction of a national petroleum reserve

On March 29, Prime Minister Pham Minh Chinh surveyed the planned location of a strategic petroleum reserve in Hai Binh ward, Thanh Hoa province, in the Nghi Son economic zone.

The Prime Minister requested Thanh Hoa province to soon work with households whose land is expected to be recovered and quickly carry out site clearance work. At the same time, the Ministry of Industry and Trade directed project construction towards quick implementation in case of emergency.

“Research who does well will be assigned to implement the project, the spirit is to diversify supply sources, to contribute to ensuring Vietnam’s energy security,” he said.

Previously, the Prime Minister discussed with leaders of a number of countries with large reserves and capacity in petroleum production and supply, proposing cooperation to support Vietnam in building strategic reserves, including the location in Nghi Son.

Most recently, during his official visit to the Russian Federation last week, the Prime Minister worked with Zarubezhneft Company – Vietnam’s leading partner in the oil and gas sector. This group proposes to supply oil and gas on a stable long-term basis and build an oil reserve system in Vietnam.

Currently, Vietnam does not have a separate national petroleum reserve. Reserved goods are currently stored at warehouses of large petroleum trading enterprises through contracts, paying fees according to norms with units. This reserve level is only about 7-10 days of consumption.

According to Decision 861/2023 on planning infrastructure for petroleum and gas storage and supply, Vietnam will build its own petroleum storage warehouse to increase reserve capacity. The country’s total reserves of crude oil and petroleum products strive to reach 75-80 days of net import, and increase to 90 days by 2030. In Conclusion 14, the Politburo also directed that Vietnam needs to soon build a national strategy on supply and reserve of raw materials and fuel in the long term.

Vietnam plans to soon build a strategic petroleum reserve in the context of continued tensions in the Middle East, creating the largest “energy bottleneck” ever. Experts believe that building a national strategic petroleum reserve system is an important intervention tool for the State to regulate supply, demand and prices. Experts also note the development of centralized energy storage infrastructure with petroleum, liquefied petroleum gas (LNG) and other energy sources.

At a working session with the Prime Minister on the same dayleader of Nghi Son Refining and Petrochemical Company said that the plant is operating stably at maximum capacity in March. They have arranged enough crude oil sources necessary to operate continuously until the end of May, thereby maximizing output to meet domestic demand.

Nghi Son Refinery and Petrochemical is a joint venture project invested by large corporations from Vietnam, Japan and Kuwait. The plant has a designed capacity of about 200,000 barrels of crude oil a day (equivalent to 10 million tons a year). Under normal conditions, the factory provides petroleum products to the Vietnamese market, meeting about 35% of domestic demand.

Prime Minister Pham Minh Chinh said that Vietnam will continue to work with relevant countries and partners to support and ensure input crude oil supply for the project. The Government also promotes solutions to facilitate the transportation of petroleum through the Strait of Hormuz to Vietnam.

Government leaders affirmed that Vietnam will deploy the fastest way to build a strategic crude oil reserve in the Nghi Son area, serving the factory and other needs.

In addition, he requested the parties in the joint venture to urgently diversify input crude oil supplies for the project. According to the Prime Minister, the parties need to innovate their cooperative thinking in the spirit of harmonious benefits and shared risks. He also suggested that in the current context, the factory should temporarily limit the production of other petrochemical products to focus on petroleum products, especially jet fuel.