Vietnam’s NSRP seeks approval to import more Kuwaiti crude amid high run rates

Vietnam's Nghi Son Refinery and Petrochemical has sought government approval to import an additional 1.68 million mt (12.3 million barrels) of Kuwaiti crude oil for its 200,000 b/d Nghi Son refinery, as the refinery runs above capacity to meet domestic product demand, sources familiar with the matter said Nov. 8-11.

The Vietnamese government does not apply an import tax on the first 10 million mt of crude oil brought in from Kuwait each year, and NSRP would have to seek government approval when importing beyond the limit.

NSRP had considered importing crude feedstock from other countries to meet demand even though the Nghi Son refinery mainly runs on Kuwaiti crude, but this was put on ice after Kuwait Petroleum International – which has a stake in the refinery – had approved the additional volume, a source added.

State-owned PetroVietnam has a 25.1% stake in the Nghi Son refinery, alongside Kuwait Petroleum International (35.1%), Japan's Idemitsu Kosan (35.1%) and Japan's Mitsui Chemicals (4.7%).

Over January-September, Vietnam imported 240,773 b/d of crude oil from Kuwait for its Nghi Son refinery, up 42.4% from the same period in 2023, latest Vietnamese customs data showed.

In March, NSRP had said it was working to raise the refinery's capacity by 15% to 20% given the potential growth in domestic oil product demand in Vietnam.

High run rates

The other major refinery in Vietnam – the 130,000 b/d Dung Quat refinery– has also been operating at more than 100% of its capacity, a source familiar with the matter said.

Binh Son Refining and Petrochemical, which owns Dung Quat, had said in August that the refinery is expected to remain running between 108% to 116% capacity over 2025-2028.

Both major refineries collectively meet about 70% of Vietnam's demand for oil products, while the remainder is sourced through imports.

In September, Vietnam's Prime Minister Pham Minh Chinh sent a letter to relevant government bodies, oil companies and the two major refineries to ensure stable oil product supply for the domestic market in 2024 under all circumstances, and avoid shortages like in 2022.

The country had suffered a shortage amid financing woes and sticky retail prices in 2022, and both major refineries have maintained high run rates since then as the country pursues fuel self-sufficiency through refinery upgrades.

In September, Vietnam's Ministry of Industry and Trade said the country consumed 18 million cu m of oil products in the first eight months, up 4% year on year, a rare move as the country does not regularly provide oil consumption data.

So far, 36 Vietnamese oil companies have been granted quotas to supply at least 28.44 million cu m of oil products this year, the ministry said without providing a breakdown.

The country's estimated production of oil products in the first nine months was at 13.53 million mt, up 20.3% year on year, data from the General Statistics Office showed

Between January and September, Vietnam imported 7.53 million mt of oil products, down 6.1% year on year, largely from South Korea, Malaysia and Singapore, according to customs data.