The department said the US$1.7 billion land clearance phase of the project is almost finished to allow construction of the refinery to begin in June or July.

The Vung Ro Oil Refinery, which is the country’s first wholly foreign-invested project, will produce liquefied petroleum gas (LPG), jet fuel, gasoline, diesel, polypropylene, benzene and sulphur.

The project, which is being implemented by the UK’s Technostar Management Ltd and Russia’s Telloil, covers roughly 200ha of land and 210ha of water surface near Vung Ro Port in Dong Hoa district.

Crude oil will be obtained from the Vietnam National Oil and Gas Group (PetroVietnam) and imported from sources in the Middle East.

A lack of domestic refineries has forced the country to export crude oil and import refined products. Last year, nearly US$6.3 billion was spent on importing 12.6 million tonnes of refined petrol products while 16.29 million tonnes of crude oil worth US$7.8 billion was exported, according to the General Statistics Office.

The country currently considers the Dung Quat Oil Refinery as “operational” while three others, including the Vung Ro Oil Refinery, will be under construction as planned.

The country’s annual demand for petroleum products is forecast to surge to 20 million tonnes by 2012.