SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
Hanoi, July 31, 2009
APPROVING DEVELOPMENT PLANNING OF RESERVE SYSTEM OF CRUDE OIL AND PETROLEUM PRODUCTS OF VIETNAM TO THE YEAR 2015, A VISION TOWARD 2025
THE PRIME MINISTER
Pursuant to the Law on Organization of Government dated December 25, 2001;
Pursuant to the Decision No,386/QD-TTg dated March 09, 2006 of the Prime Minister approving the development strategy of the Vietnam gas and oil industry, the period of 2006 – 2015, and a vision toward 2025;
At the proposal of Minister of Industry and Trade,
Article 1. Approving the development planning of reserve system of crude oil and petroleum products of Vietnam to the year 2015, a vision toward 2025 with the following main contents:
1, Development perspective
To develop reserve system of crude oil and petroleum products of Vietnam in order to stabilize domestic petroleum products consuming markets, stabilize production capacity of petrochemical refineries, ensure energy security and in accordance with the development trend of the domestic petroleum market.
To minimize harm to the economy in case of supply source of crude oil on the world market have an abnormal decrease and contribute to increase a certain economic efficiency in case the world oil price spikes.
To maximize the ability of various types of reserves and the fastest rescue possibility in the emergency situations.
To plan the appropriate reserve policies according to each stage of economic - social development and market oriented.
2, Development orientation
To set up a system of reserves terminals allocated corresponding to fuel consuming demand of the areas/regions in the country; optimize costs of investment, management, and operation.
For commercial reserve: scale and development progress of respective petroleum terminal system suitable to the needs of each region in each period.
For production reserve: scale, investment schedule, type of crude oil terminals and terminals of petroleum products in accordance with the processing capacity, product structure and production planning of petrochemical refineries.
For the national reserve: locations of the national terminals must be ensured security, absolute safety; optimize the roads to transport crude oil and petroleum products to the petrochemical refineries and consuming areas.
3, Development objective
Since 2015, the total scale of the reserve system of crude oil and petroleum products in Vietnam should reach at least 90 days of net import, meeting the criteria of the International Energy Agency (IEA).
The reserve system of crude oil and petroleum products of Vietnam includes commercial reserve, production reserve and national reserve, Schedule and scale of reserve systems for crude oil and petroleum products are in Appendix I, Section 1 attached.
a) Commercial Reserve
Commercial petroleum reserve in the terminals importing fuel to stabilize the domestic market demand is implemented by the petroleum business enterprises.
From 2009 to 2025, commercial petroleum reserve remains stably at least 30 days of demand (equivalent to about 66 days of net import in 2015 and 39 days of net import in 2025).
To ensure a minimum level of reserve and the circulation reserve volume of the petroleum business enterprises, the capacity scale of commercial petroleum terminals of the whole country must obtain at least 4.1 million m3 in 2015, at 6.9 million m3 in 2020 and 10.4 million m3 in 2025 (scale to develop capacity of commercial petroleum terminals is in Section 2,3, Appendix I).
List of projects of commercial petroleum terminals invested in period to 2015 in Section 1 of Appendix II attached
b) Production reserve
Production reserve in the petrochemical refineries include crude oil and petroleum products produced by investors as enterprises to ensure minimum volume of crude oil and petroleum products stored regularly at the petrochemical refineries in the normal operating conditions obtaining 15 days of production for crude oil and 10 days of production for petroleum products, specifically:
- Approximately 1.3 million tons of crude oil and 0.6 million tons of petroleum products, respectively 56 days of net import (33 days for crude oil and 23 days for petroleum products) of the whole country in 2015;
- Approximately 1.5 million tons of crude oil and 0.7 million tons of petroleum products, respectively 20 days of net import (12 days for crude oil and 8 days for petroleum products) of the whole country in 2025.
(Particularly, Dung Quat Oil Refinery is applied only after the plant has been upgraded to expand capacity and processing of imported crude oil; apply to 50% the design capacity of the crude oil and petroleum products terminal during processing of sweet rendering).
c) National Reserve
National reserve is owned by the State and decided to coordinate the market upon the emergency situations (supply crisis, sudden changes in the price…).
By 2025, the national reserve will include two types of crude oil and petroleum products with the scale at about 30 days of net import (corresponding to about 22.8 demand days, including 12.4 days for crude oil and 10.4 days for petroleum products), namely:
For petroleum products:
Minimum reserve of about 1.3 million tons of products (equivalent to 1.75 million m3 storage), including the categories:
+ Gasoline: 412,000 tons;
+ Diesel oil (DO): 722,000 tons;
+ Fuel oil (FO): 133,000 tons;
+ Jet fuel (Jet A1): 33,000 tons,).
In 2009, the amount of reserve petroleum products reaches about 0.4 million tons and maintains such reserve to 2020 in the case of the petrochemical refineries: Nghi Son and Long Son, Vung Ro, Can Tho and Nam Van Phong should be put into operation on schedule (before 2015).
For crude oil:
By 2025, the reserve is about 2.2 million tons of crude oil (about 3.1 million m3 of storage).
In the case the petrochemical refineries expanded their capacity and built newly are deployed on schedule as planned, put into operation before 2020, production capacity of petroleum products larger than the total demand of national consumption, the scale of national reserves will concentrate on crude oil reserve for the petrochemical refineries with the volume corresponding to 2.42 million tons, the reserve volume of national petroleum products of the previous period will be moved to commercial petroleum reserve to ensure 30 days of consumption.
d) Construction site for national reserve terminals
- For terminals of petroleum products: maintain the form of leasing terminal at the petrol and oil depots in areas such as the North (130 terminal - Quang Ninh province, Thuong Ly - Hai Phong) and North Central (Ben Thuy - Nghe An, Vung Ang - Ha Tinh), West Highlands, South (Long Son - Ba Ria Vung Tau, Nha Be - Ho Chi Minh City, Soai Rap - Tien Giang…), with estimate of additional storage capacity of Jet A1 fuel storage is about 30,000 m3 and gasoline, DO, FO terminals are about 1.17 million m3.
- For crude oil terminals: prioritize the allocation of the building of terminals near or adjacent to the petrochemical refineries to facilitate the rescue in the emergency cases for the petrochemical refineries, expected location of crude oil terminals: Long Son terminal with a capacity of about 1 million m3, Nghi Son terminal with a capacity of about 1 million m3 and Van Phong terminal with a capacity of about 1.1 million m3), After 2015, when plans to expand or build newly the petrochemical refineries, it should consider the possibility of investment in large-scale terminal in Van Phong.
Continue to research, select locations and construction scale of crude oil rserve terminals in the implementation of this plan for the locations determined and the new locations on the basis of results of research, geologic survey of each location, list of locations leasing product terminals and building crude oil terminal as shown in the sections 2, 3, Appendix II,
đ) Contents and implementation plan for national reserve terminals
Works of implementation
Duration for implementation
Petroleum, promulgating the Regulation on reserve in the production, trade of petroleum, the Fund to support for reserves to trade petroleum, making report on environmental impact assessment, strategies
Developing system of monitoring information, operating reserves system of crude oil and national petroleum products
Developing and promulgating: Ordinance on the reserves of crude oil and petroleum products
Terminal rental for reserving petroleum products:
- Phase I:
- Phase II:
Researching, surveying in details the location of crude oil reserve terminals
Studying the feasibility of project to build crude oil terminal near the Nghi Son petrochemical refinery (Thanh Hoa)
Constructing crude oil terminal near the Nghi Son petrochemical refinery (Thanh Hoa)
Studying the feasibility of project to build crude oil terminal near the Long Son petrochemical refinery (Ba Ria - Vung Tau)
Constructing crude oil terminal near the Long Son petrochemical refinery (Ba Ria - Vung Tau)
Studying the feasibility of project to build crude oil terminal at Van Phong area (Khanh Hoa)
Constructing crude oil terminal the area of Van Phong (Khanh Hoa)
e) Development of means of transportation
- To renovate, upgrade and modernize the existing means of transportation by waterway, roadway, railway to ensure flexibly and safely the transportation of crude oil and petroleum products in each stage of the plan.
- To research and develop petroleum transportation system by pipelines when the petrochemical refineries are put into operation, the new pipeline system should be researched in the next phase, it is scheduled as follows:
To build new pipelines from the Nghi Son petrochemical refinery (Thanh Hoa) to Ha Nam from Binh Dinh/Phu Yen/Khanh Hoa to the West Highlands; from the Long Son petrochemical refinery (Ba Ria - Vung Tau) to the area of the depots in Ho Chi Minh city, List of transportation pipeline systems is in Section 4 of Appendix II.
g) The total demand for investment capital
Investment capital demand of the reserve system of crude oil and petroleum products in the period until 2015 is about 2.38 billion USD; the period of 2016-2025 is about 7.19 billion USD (details in section 5 Appendix II).
4, Solution to implement the planning
Closely coordinate between various types of reserves, use thoroughly investment capital resources, manpower, experience of the State, domestic and foreign enterprises, to take advantage of opportunities for cooperation in the region as well as international cooperation.
a) The legal solutions
To complete the system of legal documents to ensure the legal bases for the reserve system of crude oil and petroleum products to have economic effects, including:
- Regarding the scale of reserves:
Commercial reserve: since 2009, the petroleum trading enterprises maintain a volume of reserves of at least 30 days of supply including class structure by the business number of the previous year.
Production reserve: petrochemical refineries maintain reserves of at least 15 days of production for crude oil and 10 days of production for petroleum products in the normal operating condition.
National Reserve: in 2025, the national reserve amount reach 22.8 days of demand to consume products, including 12.4 days for crude oil and 10.4 days for petroleum products.
To encourage the enterprises to reserve in accordance with the law regulations, clearly prescribe the regime of inspection and monitoring together with sanctions for violations for two types of reserves, commercial reserve and production reserve managed by the enterprises, on the national reserve, the Ministry of Industry and Trade coordinates with the National Reserve Department - Ministry of Finance to take responsibility for management.
- The solutions to handle upon the fluctuations of the market:
+ Immediate solution: reduce the demand of consumption for residential and industrial consumers; stabilize at a reasonable price as maximum as possible;
+ Solutions of rescue:
When the supply source to be suspended in a short-term:
- Supply source to 10% reduction: mobilize commercially available reserve sources of the enterprises in the region.
- Supply source reduced from 10% to 20%: mobilize additionally production reserve source of petrochemical refineries in the area/region.
- Supply source reduced more than 20%: mobilize additionally national reserve source of petroleum products in the region/area and national reserve source of crude oil for the petrochemical refineries.
When the supply source is ceased for a long-term and seriously: mobilize the reserve sources by the order of priority as follows:
- Mobilize enterprise reserve source including commercial reserve and production reserve;
- Mobilize the national reserve source of petroleum products;
- Mobilize the national reserve source of crude oil;
b) The solutions to support enterprises
To consider each specific project to be included in the list of special projects for investment incentive, applying the forms of low-interest incentive loan, supporting construction of infrastructure…
- Regarding to capital sources:
Investment capital for the development of commercial terminal system is invested and self-paid by the petroleum trading enterprises; the State shall only consider incentives for the mandatory reserve.
Investment capital for the development of the petrochemical refineries is invested domestically and in foreign country by the investors depending on the capacity scale and characteristics of each plant.
Investment capital for the national reserve is of the responsibility of the State, Investment capital source for this reserve could raise from the tax of consuming products or/and investment of the enterprises, the Government will consider the possibility of taxing additionally gasoline prices of final consumption so that to 2025, it could cover basically the investment capital and the entire operating costs for the national reserve terminals.
- To build infrastructure and buy crude oil, petroleum products for reserve and management units, maintenance, maintaining reserve terminals:
+ National reserve terminals of crude oil: assign to PetroVietnam and Petrolimex: to build infrastructure and reserve terminals; to organize to buy crude oil for reserve according to schedule, manage, maintain the reserve terminals of crude oil;
+ National reserve terminals of petroleum products: assign to PetroVietnam and Petrolimex and the petroleum importers to build additionally reserve terminals next to the existing depots; organize to buy petroleum products for reserve according to schedule, manage, and maintain the reserve products terminals in the form of state leasing terminals.
+ National reserve terminals of jet fuel (Jet A1) temporarily continued to assign to Vinapco for the implementation and management.
c) To participate in the treaty, organizations, coalitions of reserving crude oil and petroleum products in the region and the world.
Actively participate in treaties, organizations, coalitions of reserving crude oil and petroleum products in the region and the world as the Petroleum security agreement of the ASEAN countries (Petroleum Security Agreement); to consider the possibility to participate in the International Energy Agency (IEA) on joining and completing the responsibilities and rights, the International Energy Program (IEP), under which member countries are required to reserve at least 90 days of net import of the previous year to support the rescue as crisis occurs by the program of coordination to deal with emergency situation.
Article 2. Organization of implementation
1, Ministry of Industry and Trade
- To direct the implementation of development planning of reserve system of crude oil and petroleum products of Vietnam to 2015, a vision toward 2025. In the short-term, it needs to continue the study of conditions of engineering geology, hydrological geology, mechanical rock for the places expected to locate the crude oil reserve terminals, particularly for underground terminals as well as construction progress of these terminals on the basis of cooperation with international organizations and the experienced countries, and at the same time to implement efficiently the projects of commercial petroleum terminals and leasing national petroleum reserve terminals expected investment in the period to 2015.
- To direct the research of plans transporting petroleum products by pipeline from the Nghi Son, Thanh Hoa to Ha Nam; from Binh Dinh/Phu Yen/Khanh Hoa to the West Highlands and from Long Son petrochemical refinery to the depots in Ho Chi Minh city.
- To preside over the appraisal and additional approval of planning for the projects of commercial petroleum terminals with capacity of storage under 100,000m3.
- To preside over to make the legal documents related to state management of reserve terminals of crude oil and petroleum products in Vietnam, including:
+ Ordinance on the National Reserve of crude oil and petroleum products;
+ Regulation on reserve and trading of petroleum products;
+ Regulation on management and administration, mechanisms regulating the system of national reserves of crude oil and petroleum products (define on the mechanism of rescue; responsibilities and interests of the enterprises/companies trading petroleum for national reserves, the regulations on safety, environment etc…);
+ To develop information systems of monitoring and administering the system of national reserves of crude oil;
+ Regulation on the establishment and use of Funds to support trading of petroleum, national reserve Funds of crude oil and petroleum products.
- To preside over and coordinate with concerned ministries and branches in directing PetroVietnam and Petrolimex and the petroleum trading enterprises to research and build the national reserve terminals of oil crude and petroleum products based on research results of the development planning of reserve system of crude oil and petroleum products to 2015, a vision toward 2025.
- To prepare reports on environmental impact assessment, strategies.
To plan system of ports, channels in accordance with the requirements of transport, exporting, importing crude oil and petroleum products of the reserve system of crude oil and petroleum products to ensure principle of optimal use of Fund of ground surface, water surface for sustainable development of oil and gas industry and the maritime industry in the overall strategy of Vietnam maritime economy.
3, Ministry of Natural Resources and Environment
To make the legal documents related to environmental protection on land and on sea for the operations of storage, import, and export of crude oil and petroleum products of the reserve terminals.
To review and issue the criteria and standards for formulating and monitoring report of environmental impact assessment; strategy taking into account the conditions of Vietnam.
4, Ministry of Finance, Ministry of Planning and Investment
- To expect the plan of annual state funding for projects of national reserves of crude oil and petroleum products in the planning stage to ensure the progress and feasibility of the investment projects.
5, Assignment to the localities
To coordinate with State management agencies and companies to supplement and perfect the planning of social - economic development of provinces, cities and the economic zones, industrial zones taking into account the construction of projects of the reserve planning of crude oil and petroleum products to 2015, a vision toward 2025, People's Committees of provinces prioritize to reserve fund of ground, water surface to develop reserve terminals of crude oil in the locations that have been planned.
Article 3. This Decision takes effect from the date of signing for issuance.
Article 4. Minister of Industry and Trade, heads of concerned ministries and branches, People's Committees of provinces and cities directly under the Central Government and other related enterprises shall implement this Decision./.