Bank of China contributes to $250 million syndicated loan for the Dung Quat Oil Refinery Construction Project

Project narrative

On December 2, 2009, a syndicate of 11 — including Bank of China (BOC) — signed a $250 million USD syndicated term loan agreement with the Vietnam National Oil and Gas Group (PetroVietnam or PVN) — a Vietnamese state-owned enterprise — for the Dung Quat Oil Refinery Construction Project. The borrowing terms of the loan are unknown. BOC contributed $35 million USD to the loan syndicate. In addition to BOC, the following lenders contributed the respective amounts to the loan syndicate: Standard Chartered Bank ($30 million USD), Bank of Tokyo-Mitsubishi UFJ Ltd ($30 million USD), DBS Bank Ltd ($30 million USD), Natixis ($30 million USD), Oversea-Chinese Banking Corporation Limited (OCBC Bank) ($30 million USD), Mizuho Corporate Bank Ltd ($20 million USD), the Singapore Branch of Sumitomo Mitsui Banking Corporation (SMBC) ($20 million USD), Maybank International (L) Ltd ($20 million UDS), Mega International Commercial Bank Co Ltd ($9.5 million USD), and the Singapore Branch of Cathay United Bank ($6 million USD). The purpose of this $3 billion project was to construct the country’s first oil refinery in Dung Quat near the port of Vũng Tàu within Quang Ngai Province. Upon completion, it is expected that the refinery will have the capacity to process 6.5 million tons of crude oil per year and meet about 30% of the petroleum demand in the country. Technip, JGC Corporation, and Técnicas Reunidas were the main contractors responsible for implementation. Construction began on November 28, 2005. The project was originally expected to reach completion in December 2009 or early January 2010. However, the project was completed ahead of schedule. On February 17, 2009, the refinery launched its first product line. The refinery was officially inaugurated by Vietnamese Prime Minister Nguyễn Tấn Dũng on February 22, 2009. In the same year, industrial gross output in Quang Ngai Province increased by 144.7% and the share of industry in the province's GDP surged from 36.2% in 2008 to 46.3% in 2009. On August 16, 2009, the refinery's operations were suspended due to a "technical repair" in the residue fluid catalytic cracking unit.