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Vietnam's Phu Quoc Island oil terminal should complete by Q3 2018

Dubai, July 26, 2017 (S&P Global Platts)
  • Over 300,000 cu m of oil storage planned
  • Project planned in three phases of roughly equal size
  • First phase slated for completion next year

The first phase of a 300,000 cu m capacity oil storage facility at Phu Quoc Island, offshore southern Vietnam, should be completed by Q3 2018, with two subsequent phases completing by the end of 2019 and after 2020, project partner Baron Point Petroleum Services’ CEO told S&P Global Platts.

Baron Point, a privately held project development and trading company based in the UAE, announced over the weekend that it has formed a joint venture with state-owned PetroVietnam to finance, build and operate the storage facility.

Baron Point’s managing partner and CEO James Coppola III said Tuesday that construction of the first phase is expected to cost $150 million, and includes a 100,000cu m bonded oil products storage and terminal system.

Among other things, this will handle allocations to Vietnam’s national strategic petroleum reserves. There will also be a separate 20,000 cu m local terminal in southern Vietnam, he said.

Gasoil, diesel, motor gasoil, jet and bunker fuels will be stored at the bonded terminal under phase one, with an LPG terminal under consideration for phase two, Coppola said.

The bonded terminal’s capacity will be expanded to 300,000-320,000 cu m after 2020 in phase three of the project, he added.

CRUDE STORAGE POSSIBLE

Crude storage and trading is a possibility, but as yet there are no firm plans for that, he said.

The area under development for the project on Phu Quoc Island covers about 570 sq km, and the bonded terminal would incorporate a 60-hectare water surface with a 70,000-dwt buoy and a 20,000-dwt jetty, Baron Point said in project specifications provided to S&P Global Platts.

“Baron Point Petroleum shall engage an offtake agreement for the terminal with [Persian] Gulf countries, including Abu Dhabi supplying the majority of the fuel to the terminal system,” the company said. “Growth prospects for the bonded terminal include offtake of refined fuel in markets such as Vietnam, Cambodia, the Philippines, Myanmar, Indonesia and Singapore.”

The terminal would be located less than 5 km from Vietnam’s marine border with Cambodia, and about 1,200 km from Singapore, it said.

ROYAL CONNECTIONS

Baron Point Petroleum is 51% held by Abu Dhabi businessman Sheikh Khalifa al-Hamed, who is a member of the emirate’s royal family, Coppola said.

The company is part of Baron Point Group, “an integrated service-oriented group of companies specializing in merchant banking, channel development and global markets and trading,” and that activities of the new joint venture with PetroVietnam would include sourcing and trading petroleum products in the international market.

In the UAE, the group is well connected with Abu Dhabi Investment Authority, the UAE’s largest sovereign wealth fund, Coppola said. Baron Point’s New York-centered banking network is “comfortable” financing projects valued at about $500 million, although larger projects could also be possible, he added.

At a signing ceremony for the joint venture in Ho Chi Minh City last week, PetroVietnam Oil Chairman Nguyen Hoang Tuan, said the planned oil storage and terminal project had attracted strong financial and energy market expertise, and was a strategic development needed to propel Vietnam’s growth.

Coppola said the feasibility study on phase one of the project was complete, and the developers are currently working on the engineering drawings and building material list.

The land for the development should take less than 45 days to clear, and the first capital calls for the project are to be drawn over the next 60-90 days, he said.

–Tamsin Carlisle, tamsin.carlisle@spglobal.com
–Edited by Alisdair Bowles, alisdair.bowles@spglobal.com

PVBP Web Team