Vietnam's Nghi Son refinery could face a $1 bln loss in 2023

The loss is expected due to price volatility, rising loan interest payments, and a two-month maintenance shutdown, Kuwait's oil minister Saad al-Barrak wrote in response to a Kuwaiti parliamentarian.

Japan's Idemitsu Kosan Co. (5019.T) owns 35.1% of Nghi Son Refinery and Petrochemical; Kuwait Petroleum owns 35.1%; Vietnam's national oil firm PetroVietnam owns 25.1%; and Mitsui Chemicals Inc. owns 4.7%.

Kuwait Petroleum declined to comment on the matter. Reuters' requests for comment were not responded to by Idemitsu, PetroVietnam, or Vietnam's Ministry of Industry and Trade.

"It is currently difficult to put a timeframe on profitability," Barrak wrote in the letter, adding that talks had been going on between partners to develop both short-term and long-term measures to boost performance.

Idemitsu, Japan's second-largest oil refiner, said earlier this month that Nghi Son was profitable in terms of operational profits but not in terms of net earnings and that conversations between the refinery's sponsors were underway to increase profitability.

The $9 billion, 200-barrel-per-day refinery is expected to begin routine maintenance next Friday for 55 days.

The plant, which started commercial production in 2018, meets more than one-third of Vietnam's refined gasoline demand.

The Southeast Asian nation, a regional industrial powerhouse, has lately increased refined product imports to compensate for the shortage due to maintenance, with imports increasing 12.7% year on year in the first seven months of this year.

Last month, sources claimed the country's top importer, Petrolimex, was looking to acquire extra short-term contract diesel for delivery beginning in August.

Source: Reuters