PetroVietnam plans three ethanol plants in Vietnam

State-owned Vietnam National Oil and Gas Group (Hanoi, Vietnam), known as PetroVietnam (PV Oil) in trading circles, and a few other companies plan to develop at least three new ethanol production facilities in different parts of Vietnam.
The announcement was made by Anh Duc Nguyen, deputy general director of the Vietnam Petroleum Institute (Hanoi), at the inaugural session of the Seventh Asian Petroleum Technology Symposium held in Ho Chi Minh City earlier this month.

The investment capital required for the proposed initiative has yet to be disclosed. The plants will be set up in the southern province of Binh Phuoc, the northern province of Phu Tho, and at Dung Quat in the central province of Quang Ngai. PV Oil will develop the facilities in the northern and southern provinces.
The project in central Vietnam will be developed jointly by Binh Son Refining and Petrochemical Company Limited (Quang Ngai City) -- a subsidiary of PV Oil -- and Petro Vietnam Tourism and Service Company (Ho Chi Minh City). Each plant has been designed to have a production capacity of 100 mm litres of ethanol per year.

The project in Phu Tho is expected to start very soon as the feasibility report for the plant has already been received. The petroleum-processing and biofuel division of PV Oil has indicated that the project should be completed in 20 months and be ready for commissioning by the end of 2010. The Binh Phuoc project is currently awaiting investment, while the Quang Ngai project is scheduled for development after the completion of the Phu Tho project.
The ethanol produced in the plants will be blended with gasoline and diesel to produce E5 gasoline and B5 diesel, both of which contain 5 % ethanol. At present, gasoline ethanol is being tested on 100 taxis in Hanoi. The biofuel is expected to be commercially available from 2010.

In November 2007, the Prime Minister of Vietnam approved the development of ethanol as a biofuel. A master plan was outlined that envisioned increased research, production,testing and use of biofuels. The Prime Minister had announced that Vietnam's ethanol production would be more than 250,000 tpy by 2015 and more than 1.5 mm tpy by 2025. The country could then meet 5 % of Southeast Asia's total demand for fuel.
According to Nguyen, Vietnam aims to attract international companies for at least 20 projects to increase biofuel production between now and 2025.

The funds for these projects are expected to come from the private sector, foreign direct investment, official development assistance funds, and the state budget.
The government is trying to attract investments by offering tax breaks and reduced taxes for predetermined periods.