OREANDA-NEWS. Gazprom Neft and Vietnam Oil and Gas Group (PetroVietnam) have signed a framework agreement setting out the terms of Gazprom Neft's proposed acquisition of a stake in the Dung Quat oil refinery and the refinery's planned modernisation programme.

Dung Quat oil refinery (photo: PetroVietnam)

Gazprom Neft will acquire a 49% share in Binh Son Refining and Petrochemical, which controls and manages the refinery. The two parties are currently in negotiations over the price of the stake.

As part of the modernisation programme, the capacity at Dung Quat will be increased from the current 6.5 million tonnes to 10-12 million tonnes within one year and the plant will improve the technical efficiency of its motor fuel production to meet the Euro-5 standard. Gazprom Neft's financial contribution to the modernisation project will be proportional to its stake.

Alexander Dyukov, Chairman of the Management Board of Gazprom Neft, said; “Our Company's long-term strategy calls for a major increase in refining volumes outside Russia. Access to the capacity at Dung Quat will allow Gazprom Neft to enter the Asian market for refined products, which is one of the fastest growing and most promising markets globally. For this refinery upgrade project in Vietnam Gazprom Neft will draw extensively on the Company's experience in modernising our refining capacities in Russia and Europe, where all plants now produce fuel meeting the Euro-5 standard. By working with PetroVietnam we will ensure that the Vietnamese market enjoys a stable supply of refined products that meet world standards.”