Binh Son Refining and Petrochemical Co Ltd inks crude oil supply deals with Socar Trading and Glencore Singapore. (Source: VNA)

Hanoi (VNA) - Binh Son Refining and Petrochemical Co. Ltd. (BSR) has signed crude oil supply agreements with two trading companies – Glencore Singapore and Socar Trading SA – to supply the Dung Quat refinery for the 2018-25 period.

Under the initial agreements, Glencore Singapore will supply two million barrels of crude oil, comprised of 57 oil varieties, to the refinery each month between 2017 and 2021. It will increase the supply to three million barrels per month after the refinery completes expansion and upgrading in 2021.

Though the agreement is valid until 2025, the two sides will endeavor to maintain it until 2040, the officials said.

Meanwhile, Socar Trading SA will provide three million barrels of Azeri Light crude and two million barrels of 56 other types of crude each month between 2018 and 2021.

Glencore Singapore and Socar Trading SA have supplied the Dung Quat refinery since 2010. BSR has imported about 10.6 million barrels of Azeri crude from Socar, while Glencore is on the list of BSR’s crude oil suppliers for 2016-18.

Cooperation with the world’s leading crude oil suppliers is part of BSR’s strategy to ensure a long-term supply of crude oil for the Dung Quat refinery.

“The agreement signing today will be one among hundreds of similar acts we will conduct in the future to offset the declining domestic supply,” BSR’s chairman Nguyen Hoai Giang told reporters before the signing ceremony.

In the initial stage, the Dung Quat refinery is designed to process domestic light sweet crude, mostly from the Bach Ho (White Tiger) oil field in Cuu Long basin, but the domestic supply is projected to decline in the future.

Giang said a fairly accurate forecast shows that in the next four to five years, the domestic oil supply will be insufficient for Dung Quat’s production and the company is seeking other sources of supplies.

Located in the central province of Quang Ngai, the Dung Quat refinery’s capacity is expected to increase from its current 6.5 million tonnes per year to 8-9 million tonnes per year in 2021 after upgrading and expansion.

Giang said the upgrade will increase the plant’s processing capacity from its current 67 to hundreds of types of crude from global suppliers.

“This [upgrade and expansion] will improve the factory’s overall efficiency, reduce supply risk when domestic supply is exhausted and raise environmental standards,” Giang said.

Quek Chin Thean, Glencore Singapore’s managing director, said Dung Quat’s technology is “pretty much in place and the key issue here is the good supply contracts and supply of good crude” for its optimal efficiency and profitability.

BSR reported positive business results in the first 11 months with 71.9 trillion VND (3.15 billion USD) in revenues, exceeding its plans by 15.8 percent. It ranked 16th in the Vietnam Report’s list of the top 500 most profitable companies.

It paid about 9.06 trillion VND to the State budget from January to November.-VNA